On Thu, 10 Nov 2005, Blaine Christian wrote:

On Nov 10, 2005, at 5:56 PM, bmanning@vacation.karoshi.com wrote:

...

Begin forwarded message:

From: Brett Glass <brett@lariat.org> Date: November 9, 2005 10:43:40 AM EST

Here's the latest draft of the Internet regulation bill, dated November 3rd. Note that, like earlier versions, it subjects all ISPs and VoIP providers to intensive Federal regulation and requires them to register before providing service. It also pre-empts state and local control over rights of way. For the draft text, see

http://energycommerce.house.gov/108/news/11032005_Broadband.pdf

--Brett Glass

Well,

I have to admit I like this part... It somewhat addresses my concerns about the monopolies that Chris Morrow and Sean Donelan are perpetrating on us (just kidding guys...).

you are an evil man :)

Since port 80 and port 25 are lawful services everyone offering broadband will have to drop filters and provide full routing! Can you hear me now? Why yes, port 80 and port 25 are open, of course I can hear you.

Interesting, the filtering in question (for uunet atleast, SBC is in a slightly different position) is put in place at request of the customer, who might be 'protecting' their customer (radius port 25 filtering). I wonder who's responsibility this situation covers?

---snip-----

SEC. 104. ACCESS TO BITS. (a) DUTIES OFPROVIDERS.—Subject to subsection2 (b), each BITS provider has the duty—3 (1) not to block, impair, or interfere with the4 offering of, access to, or the use of any lawful con-5 tent, application, or service provided over the Inter-6 net;7

--end snip----

What about outside the boundaries of the USofA? Hrm... good thing all that legislation we put in place is cleaning up the 'bad content' all over the Internet... Wait, it's not :( Legislation isn't the answer to this problem, unfortunately the gov't hasn't realized this completely :(

...

I have to admit I like this part... It somewhat addresses my concerns about the monopolies that Chris Morrow and Sean Donelan are perpetrating on us (just kidding guys...).

you are an evil man :)

My fingers are tented... can you see?

...

Since port 80 and port 25 are lawful services everyone offering broadband will have to drop filters and provide full routing! Can you hear me now? Why yes, port 80 and port 25 are open, of course I can hear you.

Interesting, the filtering in question (for uunet atleast, SBC is in a slightly different position) is put in place at request of the customer, who might be 'protecting' their customer (radius port 25 filtering). I wonder who's responsibility this situation covers?

I think Dial is "safe" from this Bill. It looks to be targeted to Broadband. Personally, I was thinking about Verizon's port 80 and 25 blocking and the verbiage that has been attributed to SBC regarding making content providers pay to see SBC customers.

...

---snip-----

SEC. 104. ACCESS TO BITS. (a) DUTIES OFPROVIDERS.—Subject to subsection2 (b), each BITS provider has the duty—3 (1) not to block, impair, or interfere with the4 offering of, access to, or the use of any lawful con-5 tent, application, or service provided over the Inter-6 net;7

--end snip----

What about outside the boundaries of the USofA? Hrm... good thing all that legislation we put in place is cleaning up the 'bad content' all over the Internet... Wait, it's not :( Legislation isn't the answer to this problem, unfortunately the gov't hasn't realized this completely :(

Well, I have to agree that legislation typically does not help. If we end up with state run Internet it would probably stink even worse. How about just leaving the pipes open and charging for last mile service? It seems like an easy enough task and seems like you can make money. Sigh, it used to be all about getting folks high bandwidth connectivity. More and more it seems like folks are focusing on ways to sell bits and pieces of service (blocking ports and sites to charge premiums for "business class") instead of coming up with their own new and innovative services. Sorry, I have plenty of buddies at Verizon/MCI and SBC/ATT... Not slamming you guys, just worried and watching. Port filtering as an ongoing routine is bad practice for the Internet in general and eventually leads to folks shifting ports and making it even harder to track traffic types and worms. I am always quick to take the filters down when the worst of the worms were over. Let folks use the natural ports and they will be much easier to track down and deal with. Force everyone to high ports and they will be all over the place. If the customer has, or is a, problem then deal with them! If you offer "Internet" service your base level of service should be completely open. If you feel like you must filter ports then offer a "firewall" package or something that folks can remove if they desire. Regards, Blaine

On Nov 10, 2005, at 10:18 PM, Christopher L. Morrow wrote:

...

My fingers are tented... can you see?

indeed I can... the evil empire installed a camera in your monitor. quick read: http://tinyurl.com/89v8h

I personally feature The Fez on Fridays. The chix dig it.

The odd thing is that consumer services seem to devolve into: "who is cheapest" not "who has best service". Even FIOS is really just as inexpensive as cable-modem these days (cheaper even in some cases) and does the home user need more than 6mpbs down for internet things? (just Internet, not to include video over ip)

Well, I think there's a presumption that Internet and video over IP are still distinguishable down the road, rather than blend into a new media form. Think back how the web showed up and did the same. And that is also the main reason why this legislative effort strikes me as very misguided. The legislators assume they are dealing with a mature product, and nothing could be further from the truth. As much as we try to categorize today, we will restrict innovation (and growth of all our businesses) in the end. So, there was a time when everyone said 'good grief, what would anyone do with 1.5mbps', and where in turn engineered bitrates ended up being several orders of magnitude lower. In fact, we all were worried what would happen to our POPs and backbone when 1.5mbps consumers showed up in volume back in the '98 timeframe. We're just at the edge of the step function. I have absolutely no worry that people will figure out what to do with bandwidth. Who knows, maybe somebody will actually be successful offering an online backup service if the bw ever catches up with the inflation in storage, for example.

call me crazy but it seems like cost is king for consumers, at the pipe level. So adding on services to that at a cost is a losing proposition (or atleast not very popular, how many AOL cusotmers bought into the secure-id auth?)

I think that's all a function of differentiation not being visible to consumers. Once new media types start emerging, this has to change.

...

Sorry, I have plenty of buddies at Verizon/MCI and SBC/ATT... Not slamming you guys, just worried and watching.

join the party :)

I'd offer to buy a round, but I think that'd break the bank. ;-) Best regards, Christian

On Nov 10, 2005, at 11:08 PM, Christopher L. Morrow wrote:

On Thu, 10 Nov 2005, Christian Kuhtz wrote:

...

So, there was a time when everyone said 'good grief, what would anyone do with 1.5mbps', and where in turn engineered bitrates ended up being several orders of magnitude lower. In fact, we all were worried what would happen to our POPs and backbone when 1.5mbps consumers showed up in volume back in the '98 timeframe.

oops ;) my point wasn't that bandwidth wasn't necessary over X speed, it was that the main motivator for consumer purchase was no long bandwidth but price alone.

Sorry for the confusion.

It's ok. We're all cornfused. But, seriously, if all that emerged and mattered today is 'value brand', isn't it just indicative of the fact that consumers just haven't found the next cool bw annihilating thing yet? I doubt this is part of a general trend, unless this industry has reached a mature plateau. (which would be very sad, imho). Best regards, Christian

On Nov 10, 2005, at 11:25 PM, Christopher L. Morrow wrote:

most likely... and video-on-demand sorts of things seem like the next problem child for bandwidth on the local link. (atleast in the short term)

That's what I believe, too. And along with that, we have people hungry for incremental revenue to pay for infrastructure upgrades and go beyond the 'little Cu wire that could' *cough*. To me, those are fundamentally incompatible business models.. so, it'll be interesting to see how that one shakes out.

...

is part of a general trend, unless this industry has reached a mature plateau. (which would be very sad, imho).

just wait for ipv6 and toasters with webservers! :)

You realize that spelling out that 4 letter (well, 3+1) word on nanog is like screaming fire in a crowded theatre, followed by no less than 2 wks of debate over the merits of multihomed toasters. ;-) We all desperately need multipathing to ascertain the burntness of one's pop tarts.

Actually, as more things get a network stack I imagine more interconnection will occur requiring more bandwidth and taxing the infrastructure even more :)

Yes. That is very true. And question is what will happen with liability once even more clue exempt manufacturers will enter the ring. Capitol hill seems hell bent on wanting to tag ISPs (or BITS! *groan*) with that liability. Somehow, it feels like the wild west days are over. Or am I just getting old? I think when inet turns into a pstn regime, I'll switch to basket weaving. Best regards, Christian

On Fri, 11 Nov 2005, Christopher L. Morrow wrote:

oops ;) my point wasn't that bandwidth wasn't necessary over X speed, it was that the main motivator for consumer purchase was no long bandwidth but price alone.

In 1997, Vint Cerf was advocating the necessity of usage based pricing when he was still with MCI. http://www.cookreport.com/05.10.shtml Although MCI has not yet made a formal announcement via a press release, Cerf explained that "we are plainly discussing this with you, Gordon, and your readers." The MCI move is the outcome of what Cerf describes as a crunch between the Internet's flat rate pricing model and usage patterns where both the amount of use and disparity between use by applications has increased dramatically. Will consumers prefer to pay higher flat rate charges for everything, or prefer different pricing models when they access applications which require dramatically different service levels to include the cost as part of an application specific fee?

On Fri, 11 Nov 2005, Christopher L. Morrow wrote:

Actually, thinking about this, does a bit cost more when delivered from china or 'mci' (pick any domestic isp)? I'm asking not about the total cost, but say the cost from (to pick on sbc) SBC's front door to the consumer's front door ? Does a bit from Google (not yahoo since they have a 'relationship' with SBC) cost more than one from playboy.com ? (again, from sbc front door to consumer front door)

If the cost is the same front door to front door, then why would a customer willingly pay more for playboy over google? (or the other way around)

This is an interesting topic :)

Are you suggesting a return to cost-based regulation? At one time airline prices were regulated based on air mile distance. MCI Friends & Family charged different rates for phone calls depending whether the person you called was also a MCI customer. Was MCI illegally interfering with people calling AT&T customers by charging a different rate? Level 3 charges different rates for "on-net" versus "off-net" traffic. Is Level 3 illegally interfering with people accessing content on other ISPs buy charging more? Many cell phone companies offer "free" minutes when you call other people in your plan. Is Verizon illegally interfering with other cell phone companies by charging more? Or in each of this cases, are they actually charging some people less? How do you decide what is a "discount" or a "surcharge"? Not everyone may want to pay for 100Mbps Internet service in their home, but they may want to pay less for only 10Mbps Internet and also watch a bunch of HDTV. HDTV may be advertiser supported, and the advertiser may be willing to subsidize a portion of the bandwidth so the consumer doesn't have to pay as much. Or do we want the government to force consumers to buy more than they want?

On Fri, 11 Nov 2005, Leo Bicknell wrote:

So really the question is not a technical one, or even a business model one. It's a question of marketing. Don't sell "Internet Access" if you can't access "the whole internet" for what 99 out of 100 people define as "the whole internet". If you want to sell some more limited service, fine, give it a new name because it's not "Internet Access".

So its just marketing. Some cable companies charge you $5 a month more for HSIA if you don't buy the cable company's VOIP service and $10 more if you don't buy the cable company's video service. As long as they use a brand name for the $15 discount package, they can have whatever restrictions they chose on the discounted packages? Could they call it Internet++ or Platinum service and it would be fine? Is there some licensing body that surveys 99 out of 100 people to decide if something is "the whole internet?" That licensing body would then have the power to order ISPs to carry just those web sites? If 99 out of 100 people only access the top 20 or so web sites, is that the "whole Internet" for them, because they think the web is the Internet? Would this be "must carry" for broadcast television stations that must be carried for free by cable systems? Would the FCC maintain a list of web sites that that 99 out of 100 people use that all licensed ISPs must carry on their networks? Would that then give the FCC the power to decide what web sites ISPs don't carry?

In a message written on Sat, Nov 12, 2005 at 01:32:39PM -0500, Sean Donelan wrote:

So its just marketing. Some cable companies charge you $5 a month more for HSIA if you don't buy the cable company's VOIP service and $10 more if you don't buy the cable company's video service. As long as they use a brand name for the $15 discount package, they can have whatever restrictions they chose on the discounted packages? Could they call it Internet++ or Platinum service and it would be fine?

No, this is all pricing. You can sell "Internet Access" for $10, or $20, or $200 for all I care. It's still "Internet Access". You can discount my "Internet Access" by 50% if I also buy a hotdog from you for all I care. Doesn't change what you're selling. You can sell me faster or slower Internet access, companies never seem to be shy about telling you the speeds, doesn't change the fact that it's "internet access", and the customer is informed about what they are buying.

Is there some licensing body that surveys 99 out of 100 people to decide if something is "the whole internet?" That licensing body would then have the power to order ISPs to carry just those web sites? If 99 out of 100 people only access the top 20 or so web sites, is that the "whole Internet" for them, because they think the web is the Internet? Would this be "must carry" for broadcast television stations that must be carried for free by cable systems? Would the FCC maintain a list of web sites that that 99 out of 100 people use that all licensed ISPs must carry on their networks? Would that then give the FCC the power to decide what web sites ISPs don't carry?

Whoa, you went entirely the wrong direction, and used entirely the wrong analogy. This is not congruent to channels on a cable TV system. I don't think anyone has ever tried to sell "cable tv access" that magically gets "the" set of cable TV channels. There is no such common definition. The cable TV analogy would be selling me "NBC", but not showing The Apprentice, SNL, and the West Wing because the producers refused to pay the cable company for "access". If you chop it up, it's no longer "NBC" but "select NBC shows". The better analogy is to the phone company selling "Long Distance". If MCI sold "Long Distance", but you couldn't call anyone on Sprint's network because Sprint didn't pay the "access feee" then it wouldn't be "Long Distance". The sad thing is, these are not things with a precise definition. You can invision defining "Long Distance" before there were cell phones, and it might not have included them. Of course, I think if you stop anyone on the street and ask if they can call a cell phone using their long distance service they would stare at you blankly with a "of course, why wouldn't you" kind of response. Rather, these things are solved by the FCC and/or the courts. Someone tries to sell "Internet Access" which is missing part of what many people believe is "the Internet", and out come an army of lawyers to sue sue sue. Think a class action lawyer wouldn't love to sue SBC on behalf of all SBC customers that SBC sold them one thing and delivered another? They would jump all over it. In the end you ask who makes the call, 12 jurors, that's who. Do they believe it was "internet access" or not? Which is why, in the end, this is a slippery slope that business should stay away from. You don't want to push the envelope becuase the one who does won't know until it's too late (the lawsuit is filed and/or decided) and once you do know you're probably so far in the red from the lawsuit it wasn't worth the savings or extra revenue you thought you were getting from short changing the customer. Bottom line. Selling "internet access" where you can't get to "the whole internet" (which no one of us can define, sorry) is deceptive advertising. Bait and switch. There's a litany of case law on the subject from many industries. If you're company is anywhere near such a cliff, run, quickly, to the nearest exit. It will be bad when they get it wrong. -- Leo Bicknell - bicknell@ufp.org - CCIE 3440 PGP keys at http://www.ufp.org/~bicknell/ Read TMBG List - tmbg-list-request@tmbg.org, www.tmbg.org

On Sat, 12 Nov 2005, Leo Bicknell wrote:

No, this is all pricing. You can sell "Internet Access" for $10, or $20, or $200 for all I care. It's still "Internet Access". You can discount my "Internet Access" by 50% if I also buy a hotdog from you for all I care. Doesn't change what you're selling. You can sell me faster or slower Internet access, companies never seem to be shy about telling you the speeds, doesn't change the fact that it's "internet access", and the customer is informed about what they are buying.

Google is calling their offering "basic Internet access" and "premium service." Is "basic Internet access" different than "internet access?" Google doesn't really define what they mean by these terms. Google only gives examples of other web portals such as MSN and Yahoo as "ISPs" which don't operate their own access networks, not network ISPs like MCI or Sprint or access ISPs like Verizon or Comcast. Apparently, first you have to use Google's home page before you could access other sites. In the 1990's there were huge battles whether a user first saw the network provider's web portal or a web portal of the user's choice. There were even big battles over whether one company's dialer software interferred with another company's dialer software. Verizon is calling their offering "Broadband access." Cablevision calls their offering "Optimum Online." Are those the same as "Internet access?" I see the end result of your proposal is providers would come up with lots of different private label brand names for their services, because no one has been able to define with legal certaintity what the "Internet" is or isn't.

The better analogy is to the phone company selling "Long Distance". If MCI sold "Long Distance", but you couldn't call anyone on Sprint's network because Sprint didn't pay the "access feee" then it wouldn't be "Long Distance".

If you are familar with how telephone settlements work, you can't call people on other telephone networks if the networks don't pay the "access fees." Generally you can't call directly from MCI's "Long Distance" network to Sprint's "Long Distance" network, instead you call a customer's local access line. You can't call most special access numbers (1-800, 911, etc) using circuits connected directly to a long distance network, your PBX usually needs to route those calls to a local access switch instead of the long distance switch. Some companies offer both long distance and local access over the same line, some don't. At one time when you wanted to call someone in a different LATA, you needed to use a different company for local phone calls and long distance calls. If you didn't have a default long distance company, your long distance calls were blocked unless you dialed extra numbers. Further telephone companies regularly block access to some telephone numbers (e.g. 1-900, 976) for a variety of reasons, some required by the government. Sometimes the government requires you to specifically request access to some numbers before being able to call them. Other numbers can only be dialed using specific telephone carriers (e.g. 1-700). If you call a 1-800 number from a public payphone, the operator of the public payphone paid an additional fee from the current 1-800 subscriber. Some long distance carriers can't carry calls world-wide because they don't have agreements with carriers in other countries, so they have to pay an intermediate carrier. When they don't pay the bill, you calls be blocked to some places. Even weirder, sometimes the call will go through but the money will be placed into an escrow account (e.g. calling Cuba from the USA). Wow, there seems to be a lot of reasons why you may not be able to dial any number from any phone. Do all those limits mean you can't call it the PSTN or POTS anymore? What do you call your phone today instead?

Bottom line. Selling "internet access" where you can't get to "the whole internet" (which no one of us can define, sorry) is deceptive advertising. Bait and switch. There's a litany of case law on the subject from many industries. If you're company is anywhere near such a cliff, run, quickly, to the nearest exit. It will be bad when they get it wrong.

Bottom line, its called legal uncertainty. If no one is able to define what the Internet is or isn't, will the lawyers simply prohibit the use of the word "Internet" and do a global search and replace with a different term? Do you think a more likely outcome is the marketing departments will just invent new brand names for stuff? The companies will go on and sell whatever they decide to sell using the new name, while the term "Internet" becomes a historical footnote like ARPANET and NSFNET. Have you tried to buy an HDTV recently? Would that really be an improvement?

On Sun, 13 Nov 2005, Leo Bicknell wrote:

"access the Internet", could it be more clear?

No, because there is no legal defintion of "the Internet." During the early days of the privitization of the Internet, you could not access www.pizzahut.com (on UUNET) from various universities (on NSFNET) because the universities wouldn't pay ANS for "CO+RE access" and the NSF wouldn't let UUNET send commercial traffic over the NSFNET. Were ANS and UUNET providing Internet access even though there were sites that couldn't exchange traffic between them? Which one had more claim to the term "Internet?" ANS because it supplied access to universities or UUNET because it supplied access to other commercial networks?

...

Have you tried to buy an HDTV recently?

Would that really be an improvement?

I think HDTV hardware is quite clear. I love my HDTV. But once again, it's the service providers who are the problem. My provider (who I will let be nameless for now) doesn't keep any cable cards locally, and has to send off to the national HDTV center to get one. They lock down their set top box to a single resolution, which is not the resolution of my TV, nor the resolution of the local broadcasters. They don't carry anything but the three local networks in HD. They are also losing my business as we type to another provider who offers a better service.

Gee, it appears the marketplace is working. Why aren't you hiring lawyers to sue the service provider if they aren't giving you what you think you should get with HDTV? Instead you are using your wallet to choose. http://www.amazon.com/exec/obidos/tg/detail/-/0156005972/104-3889928-7799121... Is your hardware HDTV, Full HDTV, Native HDTV, HDTV-Ready, Integrated HDTV, HDTV Monitor? The Consumer Electronics Association and FCC has been in full swing trying to keep up with the various names being used. Almost none of the consumer HDTV hardware sold in the USA today can actually do everything possible with HDTV, it does just a subset. Is there going to be a similar association or government agency involved in trying to keep up with all the different ways to describe what the "Internet" is or isn't. Are you going to like the definition they come up with? Are they going to define various subsets of the Internet, because the reality is in the terms and conditions of almost every ISP they say they aren't responsible for anything beyond their network.

On Mon, 14 Nov 2005, Blaine Christian wrote:

We are talking about an infrastructure that does not lend itself very well to market forces. In many places FFTH and/or DSL from a single carrier are becoming the only options. I would not count a 500ms satellite hop as an option <grin>.

The cable industry claims 97% of the households passed in the US. Why don't you consider it an option?

On Mon, 14 Nov 2005, Steven M. Bellovin wrote:

In message <Pine.GSO.4.58.0511141103370.27792@clifden.donelan.com>, Sean Donela n writes:

...

On Mon, 14 Nov 2005, Blaine Christian wrote:

...

We are talking about an infrastructure that does not lend itself very well to market forces. In many places FFTH and/or DSL from a single carrier are becoming the only options. I would not count a 500ms satellite hop as an option <grin>.

The cable industry claims 97% of the households passed in the US. Why don't you consider it an option?

Do they claim to pass 97% with two-way cable?

The cable industry claims 91% of households passed with two-way cable.

On Mon, 14 Nov 2005, Steven M. Bellovin wrote:

...

In message <Pine.GSO.4.58.0511141103370.27792@clifden.donelan.com>, Sean Donela n writes:

...

On Mon, 14 Nov 2005, Blaine Christian wrote:

...

We are talking about an infrastructure that does not lend itself very well to market forces. In many places FFTH and/or

DSL from a

...

...

single carrier are becoming the only options. I would not count a 500ms satellite hop as an option <grin>.

The cable industry claims 97% of the households passed in the US. Why don't you consider it an option?

Do they claim to pass 97% with two-way cable?

The cable industry claims 91% of households passed with two-way cable.

Maybe in North America, yes. Are you sure?.. mh

On Tue, 15 Nov 2005, Jared Mauch wrote:

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The cable industry claims 91% of households passed with two-way cable.

And zero in my area. And you can't start a telco COOP in this state since the iLEC has encouraged laws to make that not legal. The two major iLECs in this state (Verizon, SBC) are not doing their FIOS nor their "Project Lightspeed" in the state last i knew.

Which state? -- Steve Sobol, Professional Geek 888-480-4638 PGP: 0xE3AE35ED Company website: http://JustThe.net/ Personal blog, resume, portfolio: http://SteveSobol.com/ E: sjsobol@JustThe.net Snail: 22674 Motnocab Road, Apple Valley, CA 92307

--On November 14, 2005 11:04:46 AM -0500 Sean Donelan <sean@donelan.com> wrote:

On Mon, 14 Nov 2005, Blaine Christian wrote:

...

We are talking about an infrastructure that does not lend itself very well to market forces. In many places FFTH and/or DSL from a single carrier are becoming the only options. I would not count a 500ms satellite hop as an option <grin>.

The cable industry claims 97% of the households passed in the US. Why don't you consider it an option?

Many would argue that ICP+ILEC == Aforementioned duopoly. IOW, if the only choices are the local ILEC and the local Franchise Cable Operator (Incumbant Cable Provider) then you still have a very limited set of market forces that can be brought to bear. True competition requires the ability for multiple providers to enter into the market, including the creation of new providers to seize opportunities being ignored by the existing ones. If two companies can act as gatekeeper for the entire market in a given area, that is not an environment where market forces carry much meaning. Owen -- If this message was not signed with gpg key 0FE2AA3D, it's probably a forgery.

Technically, lots of other providers CAN enter the market - it's just very expensive to do so. If there are customers who are not receiving service from one of the incumbent providers, a third party is certainly welcome to {dig a trench | build wireless towers | buy lots of well-trained pigeons for RFC 1419 access} and offer the services to the ignored customers.

Technically anything is possible, I could walk on the moon if I had enough $$.

The problem is that the capital expenditures required in doing so are very, very high, and most companies don't see the profit in doing so.

That is the exact problem with a [mon|du]opoly. The incumbents drive the price so low (because they own the network) that it drives out an potential competition. We don't need 8 fiber networks overlaid to every home in the US to provide competition. We need a single high quality wholesale only fiber network which is open to use by all carriers. I don't want 200' telephone poles down my street with 10 rows of fiber. It doesn't make sense.

Actually, here's where I'd disagree: market forces are exactly the thing which is keeping other providers OUT. It's too expensive for them to buy their way into these areas, and during all of the time when access was mandated to be (relatively) cheap by law, very few third parties actually built their own infrastructure all the way to homes. There are some competitive cable plants in some cities (I remember Starpower/RCN doing this in DC), but I'm not aware of any residential phone providers who built all the way out to houses exclusively on their own infrastructure.

Again, because of the monopoly held by the incumbents keeping the price low enough that you can't afford to build your own infrastructure. We don't need competition in the infrastructure business, we need competition in the bandwidth business. That can only happen if the infrastructure is regulated, open and wholesale only. The RBOCs should be split up into a wholesale *only* division (owns the poles, wires, buildings,switches) and a services *retail* division (owns the dialtone, bandwidth, customers ). The wholesale division should sell service to the retail division at a regulated TELRIC based price which will allow the wholesale division to make enough money to build/ maintain the best infrastructure in the world. Any competitive service provider can buy the same services at the same price as RBOC Retail. Regulated such that wholesale profit can't subsidize retail services. In high density areas there may be alternate infrastructure providers that can sell to CSPs and in rural america there will be one infrastructure provider and many CSPs

This IS the market at work. If you want it to be different, what you want is more, not less regulation. That may or may not be a good thing, but let's just be very clear about it.

More regulation of the physical infrastructure (the expensive piece) and less regulation of the bits to foster competitive solutions and bring along new innovations. The future innovations are not going to revolve around new types of fiber. They will revolve around what can be done with high bandwidth to everyone. -- Matthew S. Crocker Vice President Crocker Communications, Inc. Internet Division PO BOX 710 Greenfield, MA 01302-0710 http://www.crocker.com

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That is the exact problem with a [mon|du]opoly. The incumbents drive the price so low (because they own the network) that it drives out an potential competition.

So you're complaining that the problem with lack of competition is that the prices are too LOW? As a consumer, I'm thrilled with low price, and would only change providers for a well-defined benefit or a lower price.

Low prices of the monopoly is driving out viable competition. Once competition is gone the prices WILL be raised. Competition brings innovation of products and services, not just lower prices.

So should the government charter such a build? My understanding is that Verizon and SBC (maybe others, but I don't know about them) are currently working on doing a FTTH build at this time.

Yes Verizon/SBC are building FTTH in limited areas. They are doing it with profit from their government granted monopolies and with FCC assurances that they will be able to maintain the monopoly on new fiber builds. So, in a sense the government is chartering a FTTH build. They just are doing it in such a way as to kill competition and eventually hurt the nations economic development. Short term it is a good thing, long term it is economic suicide.

Presumably, as they're private companies doing it, they'd like to be able to be the ones that obtain the primary benefit. Do you think that a municipal build/new monopoly build as you describe would be cheaper or better than what SBC or Verizon are doing? If so, you should be able to convince some cities of the math.

Yes, and I have there are 4 muni fiber builds around me of which I am building a PON deployment over 2 of them. I am a *little* service provider, couple hundred megs of bandwidth, couple million $/year in revenue. I just picked up/installed my phone switch so now I can offer voice/data over the PON. So, in my small market (Western MA) I can provide a competitive service to Verizon/Comcast in certain muni- built fiber networks. I'm also a CLEC building out COs to provide ADSL2+, g.SHDSL service in areas (new products/services). It is slow going because of limited budgets but I'm having a hell of a lot of fun while doing it :)

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Again, because of the monopoly held by the incumbents keeping the price low enough that you can't afford to build your own infrastructure.

This is such an astounding comment that it needed to be singled out: most of the complaints about monopolies are that they artifically RAISE prices.

Oh, you can bet that pricing will be raised. As a monopoly you use your monopoly advantage to squash the competition. You do this by driving the price down. Once the competition is cleared from the market you are free to raise pricing at will. The only thing that is saving us at this point is 'The Act' which is systematically getting dismantled by the RBOCs. My only hope is Congress grows a pair and comes out with a sane telecom act in 2006.

Aren't you pretty much describing the '96 telecom act? The result has been the glut of inter-city fiber, and a dearth of advanced access services at the rural/suburban edge. Saying "we don't need competition in infrastructure, only in bandwidth" ignores the fact that infrastructure upgrades are required to support increased bandwidth. In addition, why treat L0/1 infrastructure in a different way than L2/3 infrastructure?

The spirit of The Act maybe but not the implementation. Congress had a good idea, they just left that damn word in there (i.e. 'impairment') which is what all of the fighting has been about. As a CLEC I am no longer impaired when I don't have access to Verizon dark fiber. So now I have to build my own which required HUGE capital, taller telephone poles, uglier streets.... it is impractical to have >1 fiber networks in the markets that I serve (rural, suburban).

...

...

This IS the market at work. If you want it to be different, what you want is more, not less regulation. That may or may not be a good thing, but let's just be very clear about it.

More regulation of the physical infrastructure (the expensive piece) and less regulation of the bits to foster competitive solutions and bring along new innovations. The future innovations are not going to revolve around new types of fiber. They will revolve around what can be done with high bandwidth to everyone.

First, I wouldn't be so sure to rule out new improvements in fiber or other physical transmission media as important - as an example, I think the widespread adoption of 802.11 has been part of a huge shift in the way people use the Internet. That said, I agree that the biggest innovations are likely to be applications, not media.

So let me take the devil's advocate position: why should prices be raised so that multiple ISPs can get a layer-2/3 connection to customers without having their own layer-1 infrastructure? Is there some service which is provided which wouldn't be cheaper/simpler to mandate that the incumbent provide? The content providers and innovators you mention should be able to work with the customers of any ISP, right?

Possibly, but we may never know what new services an ISP can innovate if they don't exist anymore. Admittedly I'm biased and as an ISP express the view from my edge of the world. I think my view is sane but I'm sure there are others that think it is not. Preservation is an important human characteristic. I have 40ish employees that I would like to keep employed. Don't kid yourself, prices will be raised once competition is driven from the market. I'd rather pay a little more now for long term financial/economic viability.

I guess what I'm saying is that "competition" is a virtue only when it leads to either improved or cheaper service. Do you think that there are improvements to service that alternative providers could make which justify the cost of the regulation you describe?

Absolutely. The RBOCs are great at rubber stamping service. Any color you want so long as it is black. Smaller ISPs are better suited to provide unique,individual services. For example, we provide a small, private DSL network to a local health organization. Bundle that network with some colo space and we shaved 80% off their telecom budget. It is only 19 offices but it did keep more money available so they can do what they do best. They also have a better network, better workflow, better productivity because of it. An RBOC would never be able to engineer/maintain something as unique as what we did. As a small provider I have a lot of time/energy invested in providing a perfect fit solution to my customers needs. As an RBOC I would change my customers needs to fit my perfect mass-produced solution. -- Matthew S. Crocker Vice President Crocker Communications, Inc. Internet Division PO BOX 710 Greenfield, MA 01302-0710 http://www.crocker.com

--On November 15, 2005 7:25:54 AM -0800 David Barak <thegameiam@yahoo.com> wrote:

--- Matthew Crocker <matthew@crocker.com> wrote:

...

That is the exact problem with a [mon|du]opoly. The incumbents drive the price so low (because they own the network) that it drives out an potential competition.

So you're complaining that the problem with lack of competition is that the prices are too LOW? As a consumer, I'm thrilled with low price, and would only change providers for a well-defined benefit or a lower price.

I think what is really represented there is that because they own an existing network that was built with public subsidy and future entrants have no such access to public subsidy to build their own network, it reduces the costs to the incumbent provider well below those of any potential competition. Thus, faced with competition, they can afford to reduce prices until competition cannot survive, then, go back to charging whatever they think they can get away with.

...

We don't need 8 fiber networks overlaid to every home in the US to provide competition. We need a single high quality wholesale only fiber network which is open to use by all carriers. I don't want 200' telephone poles down my street with 10 rows of fiber. It doesn't make sense.

So should the government charter such a build? My understanding is that Verizon and SBC (maybe others, but I don't know about them) are currently working on doing a FTTH build at this time. Presumably, as they're private companies doing it, they'd like to be able to be the ones that obtain the primary benefit. Do you think that a municipal build/new monopoly build as you describe would be cheaper or better than what SBC or Verizon are doing? If so, you should be able to convince some cities of the math.

The government should recognize that the existing build has actually been paid for mostly by public subsidy anyway and as such, should require the ILECs to split into two separate divisions. One division would be a wholesale only infrastructure delivery company that would maintain the physical infrastructure. As part of this, ownership of the physical infrastructure in place would be transferred to an appropriate local civil body (city, county, district, etc.) and said body should have an initial 5 year contract with the infrastructure portion of the ILEC to provide existing services on a provider- neutral basis (same price to all ILECs, Clecs, etc.). At the end of that 5 year contract, the maintenance of the infrastructure should be up for bid, and, if the existing ILEC infrastructure portion can't win the bid, they are out of luck. I realize there are tons of reasons this won't happen, not the least of which being that the government stupidly gave the infrastructure ownership to the ILECs in the first place and doesn't really have the authority to take it back.

...

Again, because of the monopoly held by the incumbents keeping the price low enough that you can't afford to build your own infrastructure.

This is such an astounding comment that it needed to be singled out: most of the complaints about monopolies are that they artifically RAISE prices.

Right, but, faced with potential competition, they are notorious for temporarily lowering prices well below sustainable levels in order to eliminate said competition.

...

We don't need competition in the infrastructure business, we need competition in the bandwidth business. That can only happen if the infrastructure is regulated, open and wholesale only. The RBOCs should be split up into a wholesale *only* division (owns the poles, wires, buildings,switches) and a services *retail* division (owns the dialtone, bandwidth, customers ). The wholesale division should sell service to the retail division at a regulated TELRIC based price which will allow the wholesale division to make enough money to build/ maintain the best infrastructure in the world. Any competitive service provider can buy the same services at the same price as RBOC Retail. Regulated such that wholesale profit can't subsidize retail services. In high density areas there may be alternate infrastructure providers that can sell to CSPs and in rural america there will be one infrastructure provider and many CSPs

Aren't you pretty much describing the '96 telecom act? The result has been the glut of inter-city fiber, and a dearth of advanced access services at the rural/suburban edge. Saying "we don't need competition in infrastructure, only in bandwidth" ignores the fact that infrastructure upgrades are required to support increased bandwidth. In addition, why treat L0/1 infrastructure in a different way than L2/3 infrastructure?

Nope. The '96 telecom act did nothing to take the last mile infrastructure out of the hands of the existing ILEC.

...

...

This IS the market at work. If you want it to be different, what you want is more, not less regulation. That may or may not be a good thing, but let's just be very clear about it.

More regulation of the physical infrastructure (the expensive piece) and less regulation of the bits to foster competitive solutions and bring along new innovations. The future innovations are not going to revolve around new types of fiber. They will revolve around what can be done with high bandwidth to everyone.

First, I wouldn't be so sure to rule out new improvements in fiber or other physical transmission media as important - as an example, I think the widespread adoption of 802.11 has been part of a huge shift in the way people use the Internet. That said, I agree that the biggest innovations are likely to be applications, not media.

Agreed. However, for any given last-mile buildout, the people should retain title to the infrastructure(s) and management should be by a carrier-neutral party under contract to the people. (yes, practically speaking, s/people/government/, but, I use the term people to remind us that the government is supposed to be acting as our proxy for such things). If a company wants to deploy new infrastructure, they should have equal access to right-of-way to deploy it. However, such access should include a mechanism for transfer of ownership (with appropriate compensation) of said infrastructure to the people for carrier neutrality after some fixed period of time at the option of the people.

So let me take the devil's advocate position: why should prices be raised so that multiple ISPs can get a layer-2/3 connection to customers without having their own layer-1 infrastructure? Is there some service which is provided which wouldn't be cheaper/simpler to mandate that the incumbent provide? The content providers and innovators you mention should be able to work with the customers of any ISP, right?

They shouldn't. What should happen is that ILECS should be divided into two entities and the current infrastructure and service portions of the existing pricing should be determined. After that, the infrastructure portion should be the price anyone can pay the infrastructure management company for said service, and, the service portion should become unregulated. Now, the ILEC can continue to provide service at the same price, but, they no longer have a cost-basis advantage or the ability to delay, defer, interfere with CLEC installs on the same infrastructure.

I guess what I'm saying is that "competition" is a virtue only when it leads to either improved or cheaper service. Do you think that there are improvements to service that alternative providers could make which justify the cost of the regulation you describe?

I think there are improvements and cost reductions that could be made by alternative providers. I don't think we need more regulation so much as to recognize that the subsidized infrastructure should be owned by the public for the public good, managed by a trustee on a contract basis. Owen -- If this message was not signed with gpg key 0FE2AA3D, it's probably a forgery.

--On November 15, 2005 11:23:50 PM -0500 Sean Donelan <sean@donelan.com> wrote:

On Tue, 15 Nov 2005, Owen DeLong wrote:

...

I think what is really represented there is that because they own an existing network that was built with public subsidy and future entrants have no such access to public subsidy to build their own network,

Some people may think "public subsidy" implies using taxpayer funds such as giving incentivies to companies to build factories, job training programs, re-locate corporate headquarters or even build sports stadiums.

Are you refering to the exclusive franchises granted to various cable and telephone companies in parts of the country as the "subsidy?" Or are you referring the the High Cost Support funds which used to be implicit internal transfers in the old Bell System (not taxpayer funds), or now explicit transfers through the Universial Service Fund? Or are you referring to the US Department of Agriculture Rural Utilities Service financing which assists non-RBOC rural telephone and utility companies?

A combination of the franchises (which at least in San Jose, hardly what I would call rural) and the pre-1996 copper plant. Certainly, I can guarantee you that the copper in many neighborhoods in San Jose dates back to the 1970s. My neighborhood is one such area. According to my local Cable Maintenance guys, the icky-pick cable that passes for an F1 from my CO was laid in the 1960s and hasn't been replaced (except a few feet here and there thanks to the Comcast inept contractor and their rock-wheels). As I understand it, up until the divestiture, AT&T received a certain amount of tax funding for each neighborhood they laid copper into. There is no indication in most of San Jose that the pre-1996 copper is going away any time soon. Finally, claiming that USF is just an explicit transfer is a fallacy. Look on your phone bill. Have you ever seen anyone who receives a credit on the USF or HCR lines on their bill? Everyone I've ever seen is a charge. So, either the phone companies are pocketing that money, or, there's some group of citizens somewhere who are receiving what my friends and I are putting into that pot.

Competitors have been given access to the legacy telephone copper plant (but generally not the cable coaxial plant) in most of the country. The legacy copper outside plant is quickly being replaced by post-1996 outside plant. Soon there may be little or no pre-1996 outside copper plant left. Ownership of inside wiring was transfered to the property owner a couple of decades ago.

Yes, but, the FCC is now reducing that access. Also, the fact that the current ILEC acts as gatekeeper for said access results in various anti-competitive practices being used by the ILEC to reduce service quality to competitive carriers. OTOH, if the ILEC was in a position of either operating the infrastructure, OR, competing with other providers, not doing both at the same time, I believe the behavior would be substantially different. As it stands today, the ILEC has a substantial incentive to provide better infrastructure response to it's in-house service provider than to competing service providers that don't own their own infrastructure.

Several municipalities in the US have spent taxpayer funds, or taxpayer backed, to build a municiple outside plants.

True.

What's interesting is there is relatively little competitive activity or demand for access in locations (i.e. rural) with the largest government incentives, while there is a lot of demand in areas (i.e. urban) which had minimimal or no government incentives and were funded by shareholders and other investors. The RBOCs and MSOs have been selling off their rural assets to other companies for any years.

Also true, but, in part, that is why those incentives are there.

So what is it exactly you think taxpayer funds paid for and should now own?

1. Most of the existing pre-1996 copper "last-mile" infrastructure 2. The right-of-way 3. Most of the B-Boxes 4. At least an easment for access to the MDFs if not the MDFs themselves. 5. The ridiculous amount of money granted to Pacific Bell as a result of A-95-12-03 where they actually convinced the PUC that converting from D4/AMI to B8ZS-ESF required them to completely replace their inter-co infrastructure and that they only had to do this to accomodate ISDN. (At the time most of the D4/AMI infrastructure was deployed, the need for and superiority of B8ZS/ESF was well known and this was really just another example of Pacific Bell's passive aggressive attitude towards ISDN). I'm sure if I reviewed the last 10 years of rulings I could find other examples of Pacific Bell/Pacific Telesis/SBC receiving sbusidies disguised as rate-hikes from the California PUC. Owen

--- Owen DeLong <owen@delong.com> wrote:

...

--On November 15, 2005 7:25:54 AM -0800 David Barak <thegameiam@yahoo.com> wrote:

...

--- Matthew Crocker <matthew@crocker.com> wrote:

I think what is really represented there is that because they own an existing network that was built with public subsidy and future entrants have no such access to public subsidy to build their own network, ...

Sean's post correctly identified the problem with this assertion, so I won't

The government should recognize that the existing build has actually been paid for mostly by public subsidy anyway and as such, should require the ILECs to split into two separate divisions.

You mean the existing FIBER build was mostly paid by public subsidy? Do you have a reference for that?

One division would be a wholesale only infrastructure delivery company that would maintain the physical infrastructure. As part of this, ownership of the physical infrastructure in place would be transferred to an appropriate local civil body (city, county, district, etc.) and said body should have an initial 5 year contract with the infrastructure portion of the ILEC to provide existing services on a provider- neutral basis (same price to all ILECs, Clecs, etc.).

At the end of that 5 year contract, the maintenance of the infrastructure should be up for bid, and, if the existing ILEC infrastructure portion can't win the bid, they are out of luck.

I don't know how familiar you are with what the government contracting process is like, but the word "unpleasant" comes to mind: it's long, hard, and cumbersome. Your model would substantially increase the amount of government contracting required, so you would need to be able to show a benefit to society of corresponding magnitude.

Right, but, faced with potential competition, they are notorious for temporarily lowering prices well below sustainable levels in order to eliminate said competition.

Are you alleging that the ILECs/RBOCs are providing services below cost? If so, call a regulator. If not, while the profits may be lower than desired by the ILEC/RBOC, it's certainlly "sustainable"

The '96 telecom act did nothing to take the last mile infrastructure out of the hands of the existing ILEC.

However, for any given last-mile buildout, the people should retain title to the infrastructure(s) and management should be by a carrier-neutral party under contract to the people. (yes, practically speaking, s/people/government/, but, I use the term people to remind us that the government is supposed to be acting as our proxy for such things). If a company wants to deploy new infrastructure,

You are correct. However, the '96 telecom act did give lots of other companies the OPPORTUNITY to build their own last mile access. Your proposal actually drives toward a more monopolistic, regulated environment. they

should have equal access to right-of-way to deploy it. However, such access should include a mechanism for transfer of ownership (with appropriate compensation) of said infrastructure to the people for carrier neutrality after some fixed period of time at the option of the people.

So Verizon should be prohibited from building out FTTH? I assume that your approach of "the Government owns all layer 1" would also include 802.11, GSM, CDMA, and all other network types, right? If not, why not?

Now, the ILEC can continue to provide service at the same price, but, they no longer have a cost-basis advantage or the ability to delay, defer, interfere with CLEC installs on the same infrastructure.

Any interference is currently unlawful, and all of the companies regulated under sections 271 and 272 have extensive procedures in place to prevent it. If you've got specific complaints about a specific company, you should be talking to a regulator. So, to summarize - far less than "all" of the ILEC/RBOC infrastructure was "paid for with public funds." (as opposed to user fees), you'd argue for far greater government participation in the marketplace, and the removal of any competition for layer 0/1 services, in favor of competition at layers 2 and higher. Why is that good again? David Barak Need Geek Rock? Try The Franchise: http://www.listentothefranchise.com __________________________________ Yahoo! Mail - PC Magazine Editors' Choice 2005 http://mail.yahoo.com

On Tue, 15 Nov 2005, Owen DeLong wrote:

Most places have no fiber "last-mile". Some do. Of those that do, I know that many were installed by cable companies and that there are in many of those places utility taxes that are being collected and passed along to at least partially fund said buildout. I know that Comcast signed a huge sweet-heart deal with the city of San Jose, for example before they started tearing up my neighborhood. They seem to have laid interduct to the curb and co-ax to the home. I haven't seen them bring any fiber anywhere yet, but, I presume that's what the interduct is for at some point.

So I'm confused. San Jose is doing exactly what you are advocating. San Jose has decided to use taxpayer funds to build a city-owned fiber optic conduit system it will own and lease to telecommunication companies and other users. Palo Alto also spent a lot of its taxpayers funds to build a city-owned fiber optic system. http://www.sanjoseca.gov/budget/ http://www.sanjoseca.gov/budget/FY0506/proposedCapital/10.pdf See Fiber Optics Development Fund But what does that have to do with funding ILEC facilities? As I recall, despite spending a lot of taxpayer money, the cities couldn't convince the ILEC to use the city-owned fiber optic facilities. The ILECs built and use its own facilities, without taxpayer funds. Heck, until 1982, they wouldn't even sell you a phone. The phones were stamped property of the Bell System, not for sale. I'm not sure if there is really a natural monopoly. There are multiple wires to most houses and through most public rights of way. The fact that there a damage between different provider facilities when they dig in a right of way is evidence that right of ways contain multiple providers.

On Tue, 15 Nov 2005 Michael.Dillon@btradianz.com wrote:

This is more or less what BT has done in the UK by splitting off all the field engineering into a separate company called Openreach.

Telia in Sweden did that (Skanova), now that they're privatised (partly) they're merging that unit back again, and it never was a really separate unit. Having a separate cable company with airtight divide to the service company is a must. Economy of scale says only one cable is needed to the consumer, but from there it seems there is enough different ways of doing things that it warrants a plenthora of companies to supply service, I would say at least three. Price of bw in Sweden which generally has at least 3 different ISPs colocating with telia in the larger phone stations, is at $25 per month plus tax for ADSL 8/1, personally I think that if we had a separate cable company this would actually be slightly lower, if not, we would at least have equal access to the premesis (currently something like 30% of the phonestations are claimed to be "out of space" by Telia, but they can still build-out new services themselves as they prioritize their own equipment). -- Mikael Abrahamsson email: swmike@swm.pp.se

--On November 15, 2005 6:28:21 AM -0800 David Barak <thegameiam@yahoo.com> wrote:

OK... Let me try this again... True competition requires that it be PRACTICAL for multiple providers to enter the market, including the creation of new providers to seize opportunities being ignored by the existing ones.

The worse the existing provider it is, the more practical it is to compete with them. If they are providing what people want at a reasonable price, there is no need for competition. If they are not, then the it becomes practical for multiple providers to enter the market. If you assume that the cost to develop existing infrastructure is not insanely less than the cost to develop new infrastructure, the isolation from competition comes directly from the investment. For example, if Bill Gates took a few billion dollars out of his pocket and launched 80 satellites to provide wireless Internet access, it would be damn hard to compete with him if he wasn't trying to recover those few billion dollars. But if you spend a few billion, you get a few billion worth. Anyone else can spend the same amount and get the same advantage. If he already has the satellites and is providing the service other people want at a low price, then other competitors will lose. But so what? Consumers win. And competition doesn't exist to benefit the competitors. If he already has the satellites but is not providing the service other people want or isn't charging a reasonable price, or both, then anyone else can make the same infrastructure investment for a comparable cost. If he's not satisfying demand, the demand is still there, and he's just losing some of the benefits his infrastructure could be giving him.

No... Actually, the lack of market forces in the beginning is what allows the incumbent providers to have an advantage.

There is only a lack of market forces if the incumbent is meeting the needs of the consumers. And if they are, there is no need for a competitor.

Nope... What I want is LESS subsidy to incumbents and a recognition that infrastructure built with public funds belongs to the public. Said infrastructure should be equally open to all service providers on equal terms, regardless of who holds the contract to maintain it.

Imagine instead of today's scenarios, an environment where SBC didn't think they OWNed the pipes, but, instead, the city's owned the copper in the street and contracted with <entity that doesn't sell direct end-services> to maintain said infrastructure for the city. Then, all RBOCs/ILECs/CLECs paid the same price to the City through said entity for the same services, whether dry copper connection, dark fiber, OC-X, etc. The city would have a term to the contract and would put it up for rebid periodically.

That would be market forces at work and not MORE regulation.

How would governments owning the infrastructure and setting the rules not be more regulation? And how would designing a system that favors one set of business models and effectively prohibits others that would otherwise be viable not be more regulation? Competition in business models, infrastructure technology, and the like is just as important (if not more so) as competition in price and services within a given model. What happens if the government builds a copper infrastructure and someone else wants to build fiber? How can they compete with the subsidized infrastructure you propose (what else can you mean when you say the "city's owned the copper")?

What we have today is an attempt to reduce regulation without recognizing the need to correct the damage already done by regulation.

You can't "correct" the damage. It's not possible. All you can do is pick winners and losers *again*. The previous chosen winners and losers don't really exist anymore in their previous form -- all you can do is more damage. DS

On Tue, 15 Nov 2005, Owen DeLong wrote:

areas, it's actually illegal. Usually, municipalities have granted franchise rights of access to right of way to particular companies on an exclusive basis. That makes it pretty hard for a competitor to enter the market if they can't get wholesale access to the existing copper.

Where do you think this happens? Federal law and FCC regulations don't permit exclusive franchises, and require cities to allow non-discrimintory access to right of ways.

2. The existing copper was actually deployed (at least in most of the united States) using public subsidies. The taxpayers actually paid for the network. The physical infrastructure should be the property of the people. The ownership claim of the telephone companies is almost as baseless as the Verisign clame that they own the data in whois.

Again, where are these public subsidies? In rural (i.e. non-RBOC) areas with USDA borrowing authority which I think is actually a revolving borrowing authority, i.e. rural utilities have to pay the money back? I don't think the RBOCs ever qualified for USDA borrowering. I think you are confusing taxpayers with shareholders and ratepayers. In same places governments provide companies incentitives to attract investment in their areas, such as building new factories, etc; but normally people don't think that gives the government a lien on the factory.

Semi-regulated monopolies that think they own an infrastructure built with taxpayer money. (see also 2 above)

Again, I think you are confusing taxpayers with shareholders and ratepayers.

Huh? How does this favor one set of business models? What it does is take the portion of the infrastructure that was built with taxpayer money and put it back in the hands of the taxpayer so that whatever carrier the tax payer wants to buy service from has equal access to the infrastructure.

What taxpayer money, other than the government paying its telephone bills, do you think was used to build the RBOC or MSO infrastructure?

Today, nobody can put CATV infrastructure anywhere in San Jose if their name isn't Comcast. Period. The city sold us out to an exclusive franchise deal. The current bill proposed eliminates that. That's a good thing.

Exclusive cable franchises were eliminated in by federal law in 1992. Comcast has a non-exclusive franchise in San Jose. Of course, I live across the railroad tracks in Sunnyvale, another non-exclusive franchise territory dominated by Comcast. Comcast chosen not to deploy advanced cable services on my side of the railroad tracks. The original cable franchises were often divided up into multiple areas in a city, e.g. Philidelphia has four different franchise areas, City of Los Angeles has 14 different franchise areas. Cable companies had a phased roll out of services in different areas over many years. Even today, cable companies don't have DVR, HDTV, Voice or Video on Demand rolled out to 100% of their service areas. Currently cable companies do not need to obtain a state license to offer voice or telecommunication services over its facilities. Telephone companies, and other cable competitors, still need to negotiated individual municiple franchises in order to offer video services of its facilities.

In any case, the bottom line is that whether through subsidy, "deal", or other mechanism, the "last-mile" infrastructure tends to end up being a monopoly or duopoly for most terrestrial forms of infrastructure. As such, I think we should accept that monopoly and limit the monopoly zone to that area (MPOE<->B-Box or MPEO<->MDF) and prevent an unfair advantage by separating the management of that section of infrastructure from the service providers offering services which use said infrastructure.

This is the same "create a free market through extensive regulation" that has created the disaster we have now. Any last mile technology whose cost of deployment can only be justified by the value of a monopoly on its deployment just won't be deployed in this model. That's not a free market. This separation model may turn out to be a very good one or a very bad one. But if we choose it and stick with it, what will happen in 50 or 100 years when it's either broken or irrelevent? Remember, we got to where we are now by choosing models that made sense in the voice telco time and make no sense at all now. Had we done this twenty years ago, the last mile would be dialup and billions of public dollars would have been spent to create and maintain an irrelevent technology. Meanwhile, the newer technologies wouldn't be deployed.

This, at least on a theoretical level creates a carrier-neutral party managing the monopoly portion while maximizing and levelling the playing field in all other areas.

A carrier-netural party may not be technology neutral, business model neutral, or neutral in many ways that may turn out to be important. As I see it, you give up on everything that's important from the very first step. What if a non-carrier neutral last mile turns out to be the scheme most people really want when it's offered to them? Competition in last mile technologies, deployment strategies, contract terms, and the like are not just important, they're absolutely vital. If you try to pick the winners and losers, or worse let local governments do so, you'll just get another generation of publically financed mediocre solutions while the truly innovative technologies get shut out by the monopoly arrangements. DS

--On November 16, 2005 4:23:20 AM -0800 David Schwartz <davids@webmaster.com> wrote:

...

In any case, the bottom line is that whether through subsidy, "deal", or other mechanism, the "last-mile" infrastructure tends to end up being a monopoly or duopoly for most terrestrial forms of infrastructure. As such, I think we should accept that monopoly and limit the monopoly zone to that area (MPOE<->B-Box or MPEO<->MDF) and prevent an unfair advantage by separating the management of that section of infrastructure from the service providers offering services which use said infrastructure.

This is the same "create a free market through extensive regulation" that has created the disaster we have now. Any last mile technology whose cost of deployment can only be justified by the value of a monopoly on its deployment just won't be deployed in this model. That's not a free market.

This separation model may turn out to be a very good one or a very bad one. But if we choose it and stick with it, what will happen in 50 or 100 years when it's either broken or irrelevent? Remember, we got to where we are now by choosing models that made sense in the voice telco time and make no sense at all now.

The model we have now is a certain amount of facilities from a given center to each residential unit within that centers "serving area". For any form of terrestrial facilities, I don't see many alternatives to that model. I don't see how you plan to change that model. Please explain to me what the alternative model for deploying last-mile terrestrial facilities is. As long as we are stuck with that model, I don't see how you will ever get to a point where parallel facilities are cost effective to deploy, and, I don't think that's necessary to get them deployed. The reality is that a "monopoly on the facilities" isn't required to make them cost effective to deploy, but, it is unlikely to ever be cost effective to deploy parallel facilities to create competition. This is the "natural monopoly" scenario of which I speak. If such facilities would never be deployed under said model, then, why do we have: The golden gate bridge The bay bridge The Carquinez straits bridge The new Carquinez straits bridge The Interstate Highway system Residential Telephone service without party lines CATV Realistically, for last-mile base infrastructure, there are really only a few options today. Co-ax, UTP, and Fiber. A carrier neutral monopoly provider of these base facilities in a given serving area (and nothing says the same monopoly has to run all three) could serve multiple providers of just about any possible service. If we come up with a new terrestrial delivery method which has sufficient promise, I'm betting it won't be that hard to get it deployed. Fiber, however, scales pretty far. A single DWDM pair to the home really is a pretty large amount of bandwidth. We'll have many years of warning on superior technology as it will have to be well and truly deployed in the backbone prior to any need for it at the edge.

Had we done this twenty years ago, the last mile would be dialup and billions of public dollars would have been spent to create and maintain an irrelevent technology. Meanwhile, the newer technologies wouldn't be deployed.

Nope... That shows me how much you truly don't understand how little I'm talking about monopolizing. The UTP between the MPOE and the MDF can be used to serve POTS, ISDN, DSL, DS0, T1, and other services. Since any service provider could put any equipment they wanted at the ends of any of those wire pairs, paying the monopoly maintainer only for the lease of the dry copper pair, we would have seen a much more rapid deployment of ISDN and DSL because the RBOCs would not have had any power to delay it. We would have seen multiple providers competing for PSTN service on an equal footing. We might have seen providers offering true T1 services at residential pricing.

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This, at least on a theoretical level creates a carrier-neutral party managing the monopoly portion while maximizing and levelling the playing field in all other areas.

A carrier-netural party may not be technology neutral, business model neutral, or neutral in many ways that may turn out to be important. As I see it, you give up on everything that's important from the very first step. What if a non-carrier neutral last mile turns out to be the scheme most people really want when it's offered to them?

What technology... This is literally just the dumbest layer 1 part of the network. It's Wire or Fiber. There aren't really any other options. I don't care if we create a monopoly for each of these technologies. Since all they can do is lease an unlit/unpowered piece of wire or fiber from a serving center to a building MPOE, and, nothing else, and they are not allowed to discriminate about what equipment, technology, service, etc. the provider is putting on said wire or fiber, in what way are they able to be not-neutral that you think will matter?

Competition in last mile technologies, deployment strategies, contract terms, and the like are not just important, they're absolutely vital.

And how does this eliminate that? All this does is recognize that it isn't cost effective to build multiple parallel fiber deployments and multiple parallel UTP deployments and multiple parallel co-ax deployments to every house in every neighborhood. As a result, in the current world, whoever builds the given topology first gets a monopoly advantage almost no matter how bad they are for the consumer. If, OTOH, those minimum facilities are up for use by any provider, all providers are free to compete in deployment strategy, contract terms with the end user, and, technologies which utiliize that infrastructure. If someone wants to build an additional infrastructure, fine... They can do that, but, they risk having to share after being reimbursed for the build.

If you try to pick the winners and losers, or worse let local governments do so, you'll just get another generation of publically financed mediocre solutions while the truly innovative technologies get shut out by the monopoly arrangements.

That's not what I'm trying to do. I'm trying to stop letting the winner always be the first party to deploy. Letting the clock pick the winner isn't any better. Letting the consumer pick the winner by taking the clock and the local government mostly out of the equation seems sensible to me. Owen -- If it wasn't crypto-signed, it probably didn't come from me.

--On November 15, 2005 11:02:18 PM -0800 David Schwartz <davids@webmaster.com> wrote:

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--On November 15, 2005 8:14:38 PM -0800 David Schwartz <davids@webmaster.com> wrote:

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--On November 15, 2005 6:28:21 AM -0800 David Barak <thegameiam@yahoo.com> wrote:

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OK... Let me try this again... True competition requires that it be PRACTICAL for multiple providers to enter the market, including the creation of new providers to seize opportunities being ignored by the existing ones.

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The worse the existing provider it is, the more practical it is to compete with them. If they are providing what people want at a reasonable price, there is no need for competition. If they are not, then the it becomes practical for multiple providers to enter the market. If you assume that the cost to develop existing infrastructure is not insanely less than the cost to develop new infrastructure, the isolation from competition comes directly from the investment.

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1. The existing infrastructure is usually all that is needed for many of the services in question. Laying parallel copper as a CLEC is not only prohibitively expensive, in most areas, it's actually illegal. Usually, municipalities have granted franchise rights of access to right of way to particular companies on an exclusive basis. That makes it pretty hard for a competitor to enter the market if they can't get wholesale access to the existing copper.

For now this may be true. But you'll set up another generation of the same problem if you continue to advocate subsidized infrastructure. At some point that infrastructure will be inadequate, and you will have done nothing to make it easier to build competitive new infrastructure. If munipalities granting monopolies is a problem, then stop such monopolies -- don't advocate them!

The problem is that because of cost and other factors of last-mile deployment of terrestrial infrastructure, these are natural monopolies whether you like it or not. For example, how many streets from how many different providers pass in front of your house? How many different telcos have copper to the junction box that could be used to provide service to your home? How many cable companies have fiber or co-ax in your street? For the vast majority of the united States, it is very hard to answer anything other than 0 or 1 to any of these questions. The primary problem as I see it is not the monopoly of the infrastructure, but, the inherent connection between the management of that monopoly infrastructure and one of the competitors for the provision of services over that infrastructure.

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2. The existing copper was actually deployed (at least in most of the united States) using public subsidies. The taxpayers actually paid for the network. The physical infrastructure should be the property of the people. The ownership claim of the telephone companies is almost as baseless as the Verisign clame that they own the data in whois.

It doesn't much matter and it can't be fixed. The static value of the infrastructure is basically depreciated to zero by now. The profits have been reaped. Don't justify future bad decisions on past inquities that can't be fixed anyway. Just start right from now on.

If I thought what I was suggesting was a bad decision, I wouldn't be suggesting it. However, I think there is much more justification for this decision than past inequities. As long as you have an area that tends to create a natural monopoly and allow one competitor that uses that infrastructure to also own said infrastructure, it creates an unfair environment for other competitors. Are you really advocating that the market is best served by multiple providers laying last-mile fiber? Doubling the cost of FTTH to create just two FTTH providers in an area seems pretty stupid to me. OTOH, a 10% increase (probably much less) in the cost of FTTH to facilitate a virtually unlimited number of service providers being able to access said fiber on a consumer-choice basis doesn't seem so stupid to me.

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For example, if Bill Gates took a few billion dollars out of his pocket and launched 80 satellites to provide wireless Internet access, it would be damn hard to compete with him if he wasn't trying to recover those few billion dollars. But if you spend a few billion, you get a few billion worth. Anyone else can spend the same amount and get the same advantage.

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3. Except when you consider that there are only so many orbital slots that can be maintained. (see 1 above as well). If Bill manages to launch N satellites and N leaves N/2 orbital slots available for other uses, then, it's pretty hard to launch another N satellites at any cost.

The present infrastructure in no way impedes the construction of future infrastructure. If it did, this would be a valid point. At best this just shows that the my analogy is not so good.

The present infrastructure in MANY ways impedes the construction of future infrastructure in the last-mile arena. The original infrastructure, in many cases, was trenched deep and laid in all at once in reverse depth order (electric, gas, telco, cable). Often, this was done starting with bare earth, digging a trench to the depth required by electric, putting in electric, then, filling in trench to gas depth, putting in gas, fill to telco depth, put in telco, fill to cable depth, etc. This is a relatively quick and easy process compared to retrofitting infrastructure into an existing service area. While it is true that Comcast did not seem to view existing SBC services as any form of impediment to their deployment of new infrastructure in my area, I'm actually pretty unhappy about that and lodged several complaints with the city, the PUC, SBC, and Comcast. I got to know most of the Cable Maintenance crews from SBC in my area over the course of those two weeks because they spent a lot of time near my house splicing the results of Comcast turned loose with a rock wheel (or two). Most responsible providers attempt to install new infrastructure in a manner that does not involve destroying active existing infrastructure. This takes significantly more time and money compared to starting with bare earth or an area with no existing underground utilities. True, pole-top deployment in an area with existing poles is less of a barrier, but, there you run into the same limited capacity situation. Do you really think that most neighborhood poles could support fiber from 10 or 20 providers as well as electricity and possibly copper phone service? I tend to doubt it.

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If he already has the satellites and is providing the service other people want at a low price, then other competitors will lose. But so what? Consumers win. And competition doesn't exist to benefit the competitors.

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4. But, what tends to happen instead is that Bill charges whatever he can get to recoup his billions until someone else launches their satellites (has expended the capital). Then, when they start to go after revenue, Bill drops his prices to something they can't sustain because they don't have his bankroll and have to recoup their costs. They go out of business and Bill either buys their satellites, or, they become space-junk. Bill brings his prices back up to previous levels, and, consumers lose and the competition loses too.

This doesn't work in practice. It only does in theory. There are many, many reasons why. One is that service is often contracted for on a long term. Another is that spot competitors can compete in small areas when prices drop and you can't locally vary your prices forever because it's hard logistically.

It's hard to be a spot competitor with a satellite. You chose the analogy.

As soon as the prices go back up, the competitors come back. And the screwed customers don't.

Yes and no. Once a competitor is fully dissolved through chapter 7, it's pretty unlikely that they will be resurrected when prices rise again.

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Even if Bill doesn't actually do this, the knowledge that he could causes investors to view the new satellite company as a bad risk, so, Bill's monopoly position prevents investment into competitive entry into the market.

Right, and this is appropriate. Large investments in infrastructure should *not* be made if there's already adequate service. Better to invest in places where there isn't.

Is that still true if the "adequate" service is being provided at a price which is two to three times what it should be costing and the provider is enjoying the ability to do this because nobody else is in the market space?

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Finally, since Bill doesn't have to worry about anyone else being actually able to launch competing satellites, Bill has no reason to innovate unless Bill can see a much higher profit margin at the end of said innovation. (look at today's Telco as a prime example of this form of complacency. Actually, telco's are very innovative, but, they focus on regulatory innovation instead of technical innovation).

If this happens, eventually there will be enough of an innovation gap that the superior products and services competitors could produce overcome the infrastructure advantage the incombent has. The better the incumbents prices and service, the less chance anyone will bother to compete with him. Virtual competition has the same effects as real competition.

Right... After 25 years, we're finally starting to see the beginnings of recognition of that in American telecommunications services. Generally speaking, I don't think the market is well served by having to wait that long.

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If he already has the satellites but is not providing the service other people want or isn't charging a reasonable price, or both, then anyone else can make the same infrastructure investment for a comparable cost. If he's not satisfying demand, the demand is still there, and he's just losing some of the benefits his infrastructure could be giving him.

5. But, if you want this analogy to match the current copper plant in the ground in most of the US, then, you have to also account for the fact that Bill received 30-45 of his 60 billion in investment in the form of public subsidies. Are you going to give all comers the same public subsidy (blank check)? Instead, you end up with exactly what we have today in the telcos. Semi-regulated monopolies that think they own an infrastructure built with taxpayer money. (see also 2 above)

I would write off the money badly spent as just that and stop using it to justify repeating the same errors over and over. This is much better than repeating the same error so that 50 years from now we have the same problem with a new generation of inadequate publicly-financed infrastructure.

I don't want to repeat that error. I want to make the public infrastructure paid for by the public accessible to the public on the public's terms instead of on the terms of some monopoly business. As stated, the company that gets the contract to maintain the infrastructure in my scenario is contracted to do so in the public interest, NOT in the service of any particular service provider.

The government can't do a good job of picking winners and losers, so stop letting it.

Agreed. So, let the government do what it does well... Manage the things that tend to be natural monopolies and keep it out of everything else as much as possible. Are you arguing that there should be competition for the provision of highways, for example? How would you see that working? Do we stack six copies of I-80 on top of each other, or, do we allocate multiple semi-parallel routes for freeways and let different companies build different routes and charge what they want for each of them? How do you see that working on a neighborhood level? Even if you think it works at the highway level, we're really talking about the neighborhood streets here. The last-mile infrastructure for terrestrial services looks a lot more like a local roadways inside a neighborhood than any other analogy I can think of. I have yet to see any environment where this has been accomplished on anything other than a monopoly basis.

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No... Actually, the lack of market forces in the beginning is what allows the incumbent providers to have an advantage.

There is only a lack of market forces if the incumbent is meeting the needs of the consumers. And if they are, there is no need for a competitor.

Nope. There is a lack of market forces for several other reasons.

+ Lack of access to right of way + Burdensome regulatory environment requiring huge up-front overhead -- you can bet that AT&T didn't start with 5 full time lawyers. It's pretty hard to run a CLEC in most states with anything less today. Even if you only want to serve your neighborhood.

Yes, but these are hardly arguments for more public subsidy or control of infrastructure.

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+ Public subsidies for the ILEC's initial (and in some cases subsequent) buildout which is not available to CLECs.

Yes, so stop the subsidies. More subsidies to fix the past subsidies won't work. "Fair" subsidies won't work because you can't subsidize everything.

I don't want to subsidize anything, but, there are certain limited portions of the network which tend to create natural monopolies no matter how hard you try to prevent them. For those situations, decoupling said monopoly from as many of the "uses" for said infrastructure is a necessary step to prevent the monopoly from expanding beyond that scope.

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The list goes on, but, believe me when I tell you that there are plenty of consumers in California that do not feel that SBC is meeting their needs, but, they don't have access to a real CLEC.

Oh, I know that story, believe me.

So, do you really think that if SBC had the same terms for access to the MDF<->MPOE leg that any competitor had this would not actually change or would get worse? I don't. I think it would actually solve many of the current problems and encourage many of the CLECs to re-enter the market.

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Huh? How does this favor one set of business models? What it does is take the portion of the infrastructure that was built with taxpayer money and put it back in the hands of the taxpayer so that whatever carrier the tax payer wants to buy service from has equal access to the infrastructure.

And what about a carrier that needs different infrastructure to provide the type of service it wants to provide?

They can build it, and, if they get a competitor that wants equal access to it, they get reimbursed for the build.

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The current bill actually has a pretty good chance of levelling this playing field by giving not only access to infrastructure, but, also access to right of way to all comers on a non-discriminatory basis. I think that's a good thing.

And repeating the same problem 50 years from now when innovative services can't compete with the maintained subsidized infrastructure.

I don't see that. First, the current bill doesn't do some of the things I'm saying need to be done here. It, instead, requires what you want in terms of everyone lays their own copy of infrastructure into the public rights of way duplicating and multiplying the cost of the last-mile infrastructure by the number of competitors. Yes, that's a level playing field, but, it's _NOT_ an efficient one. I suppose we have to decide which "mistake" is the better one to make.

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If the people have control over the "last-mile" infrastructure and it is operated in a carrier neutral fashion, that creates a level playing field for innovation in everything outside of "last-mile" infrastructure.

That's not enough. The last mile infrastructure is as important as every other part. It may even be more so.

Agreed, but, it's also an area that tends to be a natural monopoly. Leaving that natural monopoly in the hands of a single provider that is also providing services on top of that infrastructure creates an advantage for that provider. Requiring a separation between LMI operator and service provider (or at least the ability to create such a separation when it is in the public interest), OTOH, might just be an improvement.

The present system was made by subisidizing infrastructure that was felt to be good enough at the time it was designed. This is what created all the flaws in it that bother you.

Not true. Most of the flaws that bother me in the current system have to do with the fact that, for example, SBC is both LMI infrastructure operator _AND_ service provider. This makes it very difficult for anyone outside of SBC to have a truly competitive offering because they are dependent on SBC for their LMI whether they like it or not. OTOH, if the shared LMI was operated by a neutral third party and leased to SBC and any other competitor at the same price for the same component, that would resolve most of what is bothering me about the current system. It would allow me to buy phone service without giving money to SBC. Today, I can't do that unless I go to VOIP over WISP which has its own set of tradeoffs.

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If the people also make sure that right-of-way is managed in a carrier-neutral fashion (no more exclusive franchises to single carriers), that creates a level playing field for innovation in infrastructure. All providers have the same difficulty getting stuff into the right-of-way and the same inherent costs. No carrier gets favorable treatment over another.

The same would be true without subsidized or government owned last miles, wouldn't it?

Partially, but, do you really think that the market is there to support duplicate copies of last mile infrastructure? That's a huge cost at a multiple of 1. If you want two providers in a given area each with 50% market share, that's huge*2. If you want real competition, say 5-10 providers, that's huge*5 to hughe*10. I don't know how realistic this number is, but, I bet if I'm off by much, I'm way too low. Let's assume it costs $1,000 to bring some infrastructure component (fiber, copper, etc.) to each house in a city. Let's look at San Jose as a typical city example. According to <http://www.sanjoseca.gov/planning/Census/Citywide_dp_pdf/housing_char_2000-4.pdf> (the 2000 US Census), there are 281,706 housing units in San Jose. So, that's a total cost to deploy San Jose once of 281,706,000. Assuming a standard 20 year payback on infrastructure, that's $50/yr/household that each company needs to make, just to cover the deployment. If we have 10 providers, then, each theoretically needs to make $500/yr/household. I don't think there's even $250/yr/household on the table for deployment if you really think it through. That's why I believe last mile deployment of terrestrial resources creates a natural monopoly. Whoever deploys first gets a commanding lead in controlling the infrastructure and there is strong disincentive to invest in competing infrastructure absent some certainty of gaining a substantial portion (more than 50%) of the existing competitors customers. Sure, if the existing competitor CAN'T serve their customers better, better service and/or lower price might make that possible. However, if the existing competitor can do so, they have a serious advantage being after customer retention instead of trying to gain new customers. Multiple studies estimate that it is between 5 and 20 times as expensive to gain a new customer as to preserve an existing one. This is essentially "marketing 101".

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Today, nobody can put CATV infrastructure anywhere in San Jose if their name isn't Comcast. Period. The city sold us out to an exclusive franchise deal. The current bill proposed eliminates that. That's a good thing.

No, it does not. It does precisely what you are complaining about -- it grants the city a monopoly on the last mile! And still nobody can build infrastructure if there name isn't San Jose.

No, the proposed bill doesn't, and, neither does my proposal. The proposed bill does exactly what you claim you want. My proposal says that anyone who does has to be willing to sell the LMI portion to the city if the city feels it is in the public interest for the price quoted for buildout prior to the start of the buildout. IOW, you can build whatever you want/need, but, if a competitor wants equal access to it and you aren't providing that, you have the risk of the city coming to you and making that possible for your competitor whether you like it or not. You haven't lost anything because the city has reimbursed you the cost of building said infrastructure. You still have the same access to that infrastructure as your competitors, and, your customers don't see any disruption in service, but, your competitors gain access to the LMI without having to do a parallel build.

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Competition in business models, infrastructure technology, and the like is just as important (if not more so) as competition in price and services within a given model.

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Yes... By taking away the subsidized monopoly infrastructure from the ILEC and making them compete on a level field with other LECs, they can do just that. The existing infrastructure was built with taxpayer money and should be equally accessible to all service providers.

Just write it off. In 50 years it will be worthless anyway. Let's set the rules for the future rather than trying to fix the past. I don't want a 20 year solution that screws us over for 100 years. That's what we have now, and that's what you're proposing.

Not exactly. Try to stop looking at what I'm proposing through whatever filter you've applied and look at the whole proposal: 1. ANY provider may build infrastructure in public right of way. 2. ANY provider doing so must provide a price quote for said buildout to the local governing body. The governing body and provider must come to agreement in good faith as to the quote being reasonable and just (e.g. provider isn't quoting 10x cost and city isn't trying to claim 0.1x cost). 3. Provider retains title to infrastructure until such time as the local governing body makes a finding of fact that public ownership of said infrastructure is in the public interest and buys it from provider at above quoted price. 4. City retains, in perpetuity, right to purchase said infrastructure at quoted price. 5. For any such infrastructure owned by the city, city shall operate or contract for the operation and maintenance of said infrastructure in a non-discriminatory fashion open to all service providers on an equal cost basis and to the benefit of the public. Such costs shall reflect the actual cost of operations and maintenance for the previous year, appropriate contingency and liability funds, overhead, etc. I think this is win-win for everyone except a monopoly-oriented service provider. Consumers get easy access to competition for any form of service that can be delivered by existing or future infrastructure. Providers have no disincentive from building new infrastructure as long as they do so in a model that assumes they will have competition and cannot count on LMI monopoly as an advantage. Providers which sell wholesale at fair and reasonable prices with comparable service levels to their wholesale customers are unlikely to lose control of their infrastructure (it is unlikely to be in the public interest to buy it in that case).

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Sure, FFTH is another roll-out. One way that could happen is when a new provider comes along and wants FFTH to provide their service, they are asked to provide a quote for the roll-out cost. Then, after roll-out, if another provider wants access, the people have the option of buying said infrastructure and rolling it into the existing management system for the price quoted. That way, the provider didn't pay for infrastructure being used by someone else and the people aren't forced to pay for infrastructure they don't want. Market forces still dictate which infrastructures get deployed, but, there's no early-deployment monopoly as a result.

The problem is, the early-deployment monopoly may be what justifies the cost of the rollout. Take that away, and you just don't get the new technology. So long as there is equal access to do a roll out, there is no problem. Yet your plan *reduces* such access.

Nope. It doesn't. It just prevents the early-deployment monopoly from becoming a long term competitive advantage. Re-read my detailed 5 point explanation above. However, please don't confuse this part of my proposal with the current bill. The current bill does exactly what you describe as desirable, but, I still think at least that is preferable to the current situation.

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You can't "correct" the damage. It's not possible. All you can do is pick winners and losers *again*. The previous chosen winners and losers don't really exist anymore in their previous form -- all you can do is more damage.

Perhaps correct the damage is the wrong term. I want to avoid creating the damage all over again.

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Actually, once AT&T and SBC merge, it will be pretty close to the original form of AT&T prior to Judge Greene's decision. Sure, there will always be winners and losers. The question is the selection method. Today, the selection method is the government selecting the incumbent carriers as winners and the ratepayers are the losers. Under the proposed bill, that changes and I think the ratepayers at least get more input into the selection process.

But it helps innovation not one bit and does nothing to ensure competition in the future. It's another small step to preserve what's here at the cost of what could be.

Nope... The current HR does exactly what you say is desirable. What you claim not to like about my plan is NOT part of the current HR, just something I think we need if we are to have viable competition for last-mile services in the long run. Owen -- If this message was not signed with gpg key 0FE2AA3D, it's probably a forgery.

--- Owen DeLong <owen@delong.com> wrote:

Is that still true if the "adequate" service is being provided at > a price which is two to three times what it should be costing and > the provider is enjoying the ability to do this because nobody else is in the market space?

I'm confused. Earlier in this thread you were arguing that the current providers were keeping priced artificially LOW. <snip>

After 25 years, we're finally starting to see the beginnings of recognition of that in American telecommunications services. Generally speaking, I don't think the market is well served by having to wait that long.

So, do you really think that if SBC had the same terms for access to the MDF<->MPOE leg that any competitor had

Are you saying that US market is 25 years behind other countries in anything? There is greater hi-speed penetration in some non-US markets with dramatically different demographics (mostly much higher density), and few businesses here have seen a compelling reason to move to IPv6, but what exactly is so lacking? <snip> this would

not actually change or would get worse? I don't.

OTOH, if the shared LMI was operated by a neutral

The example the above quote referred to was about SBC not meeting the services of some individuals in CA, but who don't have access to a CLEC. It's fairly disingenuous to say that the MDF <-> MPOE leg is the problem there, because that is actually the regulated portion of SBC (in-region ILEC activities are heavily regulated, and a great deal of emphasis at SBC is placed on compliance with regulations): if no CLECs have stepped up to provide service to those customers, that's probably because they don't think it's profitable to do so. third party

and leased to SBC and any other competitor at the same price for the same component, that would resolve most of what is bothering me about the current system. It would allow me to buy phone service without giving money to SBC. Today, I can't do that unless I go to VOIP over WISP which has its own set of tradeoffs.

Depends on the town, doesn't it? In DC, there are three phone providers who run their own last-mile to (some) homes. Nobody other than Verizon will come to my house, but Cavalier and RCN both go to condo buildings nearby. In addition, lots of people here have VoIP over cableco (mostly Comcast), and even more have no land line at all. Anecdote: A co-worker is getting Verizon FTTH, and they have to dig about a 3/4 mile trench to his house (he's rural). He's not being charged for the installation, even though it'll be several years before it pays for itself. It's hard to see that as an example of a {big | evil} monopoly which is hurting consumers. Regarding your proposal, are there other utilities which are subject to the same rule (that the infrastructure can be repurchased by the city at the city's convenience)? Another thing to consider is the definition of "LMI" - specifically, what do you mean by "last mile?" Do you mean from the house to the street (think sewer), or from the house to a junction box on the corner (think power), or from the house to a central office somewhere, or some other distance? Also, what about provisions for point-to-point layer-1 service? Under your proposal, cities may become responsible for providing this themselves - is that what you intend? David Barak Need Geek Rock? Try The Franchise: http://www.listentothefranchise.com __________________________________ Yahoo! Mail - PC Magazine Editors' Choice 2005 http://mail.yahoo.com

--- JC Dill <lists05@equinephotoart.com> wrote:

David Barak wrote:

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--- Owen DeLong <owen@delong.com> wrote:

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Is that still true if the "adequate" service is being provided at a price which is two to three times what it should be costing and the provider

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enjoying the ability to do this because nobody else is in the market space?

I'm confused. Earlier in this thread you were arguing that the current providers were keeping priced artificially LOW.

They are keeping prices artificially low now, to drive out the competition. They will raise prices once they have no competition, as monopoly companies always have done in the past.

Standard free market behavior is for a large company to cut prices (when they can, when they have income from some other source to afford this tactic) to drive the competition out of business. Then once they have a monopoly to raise prices (and thus profits). Check out the price for Microsoft software over the years. As their products each became a de facto monopoly in their market the prices went WAY up.

Windows 98 price (in 1997) -> $209 Office 97 Standard (in 1997) -> $689 Windows XP price (now) -> $199. Office 2003 (now) -> $399. Want to try that again? The problems most people have with microsoft's monopoly status have nothing whatsoever to do with the price of the software which forms the basis of their monopoly (windows + office), but rather their willingness to use the profits from them to subsidize other losing ventures to drive out other competitors. The argument regarding ILECs is reversed. I appreciate the citation of Standard Oil, but it is a fallacy to think that there is a one-to-one mapping between SO and any/all of the ILECs. Assertions that "monopolies do X and they're bad, and we know that Y will eventually do bad because they're a monopoly" are circular. David Barak Need Geek Rock? Try The Franchise: http://www.listentothefranchise.com __________________________________ Yahoo! Mail - PC Magazine Editors' Choice 2005 http://mail.yahoo.com

--- Owen DeLong <owen@delong.com> wrote:

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Windows 98 price (in 1997) -> $209 Office 97 Standard (in 1997) -> $689 Windows XP price (now) -> $199. Office 2003 (now) -> $399.

Want to try that again?

Yes... Here's some more accurate data:

Windows 3.1 price $49 Windows 3.1.1 price $99 Windows 95 (Personal) price $59 Windows 98 (Personal) price $99 Windows ME (Home) price $99 Windows NT WS price $99 Windows 2000 Pro price $299 Windows XP Pro Price $399

If you're going to use list prices, use list prices all the way through. The above represent, to the best of my knowledge, M$ retail pricing for the lowest level of their "client" version of their OS available at the time.

You're mistaken. http://www.theosfiles.com/os_windows/ospg_w98.htm http://www.microsoft.com/products/info/product.aspx?view=22&pcid=a9d2c448-eb05-4a2b-a062-9c711c533e0c&type=ovr http://www.theosfiles.com/os_windows/ospg_wxp_pro.htm So it goes from 209 to either 199 or 299 depending on whether you want "home" or "pro." That's hardly an egregious markup for a better OS, several years later.

I confess I haven't followed pricing on M$ Office, but, I'm willing to bet that an apples-to-apples comparison would reveal similar results.

http://www.computerwriter.com/archives/1997/cw230197.htm#prices http://www.microsoft.com/office/editions/howtobuy/compare.mspx I was doing a similar apples-to-apples comparison. Look, just accept that not all data points will line up with your assertions - find some others instead. If there are so many, then there have to be better examples than these.

Finally, the price of the client software is actually not the primary problem with M$ monopolistic pricing. It is the back-end software where they really are raising the prices. Compare NT Server to 2K or XP Server or Advanced Server. XP AS is nearly double 2000 AS last time I looked.

Microsoft hardly has a monopoly on servers. If their prices are too high, use something else.

...

The argument regarding ILECs is reversed. I appreciate the citation of Standard Oil, but it is a fallacy to think that there is a one-to-one mapping between SO and any/all of the ILECs.

True. What is the point?

Standard Oil is a strawman argument. The ILECs are dissimilar in nature and behavior from Standard Oil. An assertion otherwise requires evidence.

...

Assertions that "monopolies do X and they're bad, and we know that Y will eventually do bad because they're a monopoly" are circular.

Statements like "In the past, monopolies have done X, and, the results of X are bad. Since Y is a monopoly, we can expect them to do X as well, with similar negative results." are not circular. They are attempting to learn from history rather than repeat it.

"History doesn't repeat itself. Historians do." -unknown (to me at least) Don't fight the last war, and especially don't fight it in a way which will impede future innovation.

Since the market is risky to deploy LMI once, you will have a hard time that the market exists to pay for multiple copies of a given LMI in order to support competition.

If there's money in it, then someone will fill the need. I still haven't seen the justification for treating layer-1 last mile differently from layer-2 last-mile, or for that matter layer-3 last mile. Why shouldn't the city just say "everyone hop on our citywide IP network, and then everyone can compete at higher layers of the stack?" David Barak Need Geek Rock? Try The Franchise: http://www.listentothefranchise.com __________________________________ Yahoo! Mail - PC Magazine Editors' Choice 2005 http://mail.yahoo.com

So... Microsoft has a monopoly on Windows and the basic OS costs you $299 with virtually no server capabilities.

In the POSIX-style OS world, where you have multiple competitors, prices range from $0 to $179.

Either these products are comparable or they are not. If they are comparable, then Microsoft has no monopoly and the prices are low, as low as $0. If they are not comparable, then the fact that one is cheaper says nothing.

True, but, this one does. There are multiple ways to skin a cat, and, multiple versions of Windows pricing. Any way you slice it, MicroSoft remains the most expensive OS in the market. Everyone elses OS prices have come down since the days of Win 3.1, Microsoft's have gone up (about 600% -- $49 to $299).

Which proves that Microsoft has been *unable* to keep prices high. OS prices have fallen despit Microsoft's effort to keep prices high.

...

Microsoft hardly has a monopoly on servers. If their prices are too high, use something else.

Microsoft has a monopoly on Active Directory servers. Microsoft has a monopoly on Exchange servers.

If you are unfortunate enough to need either of these things (I thank my lucky stars every day that I am not), you have to buy them from Micr0$0ft.

Every company has a monopoly on its proprietary technologies. If you need either of them, thank your lucky stars Microsoft makes them available to you.

Agreed. Instead of granting further monopoly positions and first-arrival advantages and again allowing the first provider into the market to prevent all future comers, let's avoid the fight and separate the LMI from the overlying service.

Except it may be that the right and best business model is combined LMI and overlying service. It may be that some infrastructure is too expensive to provide without the added revenue from an overlying service monopoly. What is your solution to that problem? Subsidy? Or live without?

If you limit it to the scope I speak of, you are limited to an area where very little innovation has occurred in the last 50 years, or, is likely to occur in the next 50. Category 3 UTP hasn't changed in more than 50 years. Fiberoptics date back to the 1840s with singlemode being introduced in 1961 and adapted for telecommunications in 1966 and it's current form being perfected around 1970. 75 ohm TV Co-Ax has also been pretty standard for a very long time (RG58 is, I believe, the most common)

I think this is a deceptive argument. There has been lots of innovation in last miles. Fiber to the home, IP over powerline, wireless, over cable, via satellite, and so on. A subsidized way of doing the last mile could damage this innovation. And I don't think you can regulate without subsidizing. (See my other posts for the arguments why regulation will compel either subsidy or shortage.)

Given universal household access to singlemode, UTP3, and RG58, I don't believe there is a single terrestrial facilities based communications service available today that would be impossible (obviously, the current cost of DWDM hardware and supporting backbone equipment makes OC-192 to the home impractical today, but, not impossible given the facilities above).

And if you decide that what we have today is good enough and compel or subsidize it, then there will be no reason to develop newer technologies. This is looking at where we are and ignoring how we got here.

I cannot deny that there is a possibility someone will come up with some super-innovative media for terrestrial facilities-based transmission, but, I can say that there is very little effort being put into such research at this time because single-mode fiber is so economical at this point that nobody really feels there is a need for or significant benefit to such an improvement. Were a compelling new media to come along, I'm sure that someone would deploy it.

If it's so economical, why can't five companies bring it to my house? How can you argue it's super-economical and a natural monopoly because of expense at the same time? How do you know that the alleged natural monoply isn't a technical problem with a solution around the corner?

Bottom line, we have achieved market competition and fair access to all other portions of the network. LMI at layer 1 has proven to be the sticky wicket that remains a natural monopoly no matter how hard we try to change that. As such, I think it is time to accept the fact and deal with it accordingly, instead of continuing to allow it to preserve destructive monopolies in other areas.

In other words, single-mode fiber to the home is *NOT* so economical. It is funny how the advocates of regulation always have to argue both sides of every issue to try to find some traction. "Monopoly means higher prices." But the prices are lower. "Well then, monopoly means lower prices, and somehow that's bad too". And at the same time the last mile is so cheap no innovation is needed and so expensive no competition is possible. And on and on and on. DS

On Wed, Nov 16, 2005 at 08:58:45AM -0800, David Barak wrote: [ snip ]

Anecdote: A co-worker is getting Verizon FTTH, and they have to dig about a 3/4 mile trench to his house (he's rural). He's not being charged for the installation, even though it'll be several years before it pays for itself. It's hard to see that as an example of a {big | evil} monopoly which is hurting consumers.

In (at least) the Long Island, NY market, Verizon FTTH/FIOS installers physically cut and decommission the copper upon fiber install. Bye-bye DSL competition. Since they won't bring back the copper even you don't like the FIOS service, it's permanent. ISTR that the fiber doesn't carry the same restrictions on Verizon as copper did, which is a big incentive (for them) to roll out FIOS that way. -- Henry Yen Aegis Information Systems, Inc. <henry@AegisInfoSys.com> Hicksville, New York

Robert E.Seastrom wrote:

...

In (at least) the Long Island, NY market, Verizon FTTH/FIOS installers physically cut and decommission the copper upon fiber install. Bye-bye DSL competition. Since they won't bring back the copper even you don't like the FIOS service, it's permanent. ISTR that the fiber doesn't carry the same restrictions on Verizon as copper did, which is a big incentive (for them) to roll out FIOS that way.

My understanding is that there is a fairly small number of pots circuits (2?) that they can bring in over the B-PON, and that moreover ISDN BRI and hicap (eg. repeatered or HDSL DS1 service) are entirely incompatible.

In Virginia, there's anecdotal evidence that suggests that they'll leave the copper upon request, and won't even try to remove it if you still need it for service.

My understanding (also anecdotal, but based on firsthand FiOS experience as described by a 25-year telco consultant who's done plenty of work with Verizon, both as a consumer and a telecomm professional) is also that they will leave the copper if you ask them to do so, but will get rid of the copper by default. Apple Valley, California (the town where I live) has just awarded a second cable franchise to Verizon, who will be competing with Charter here, so I'm sure FiOS is not too far in the future for us. They've already rolled out FiOS to a few other cities in Southern California and named Apple Valley in a press release from about a year ago. If we decide to switch -- and that's a big "IF", since Charter's Internet access been reliable for us -- I guess we'll find out for ourselves whether we can keep our copper or not. -- Steve Sobol, Professional Geek 888-480-4638 PGP: 0xE3AE35ED Company website: http://JustThe.net/ Personal blog, resume, portfolio: http://SteveSobol.com/ E: sjsobol@JustThe.net Snail: 22674 Motnocab Road, Apple Valley, CA 92307

Owen DeLong wrote:

VZ certainly shouldn't remove any copper that doesn't belong to VZ. So, unless they are the ILEC in Apple Valley

They are the ILEC in Apple Valley. -- Steve Sobol, Professional Geek 888-480-4638 PGP: 0xE3AE35ED Company website: http://JustThe.net/ Personal blog, resume, portfolio: http://SteveSobol.com/ E: sjsobol@JustThe.net Snail: 22674 Motnocab Road, Apple Valley, CA 92307

On Sat, 26 Nov 2005, Robert E.Seastrom wrote:

My understanding is that there is a fairly small number of pots circuits (2?) that they can bring in over the B-PON, and that moreover ISDN BRI and hicap (eg. repeatered or HDSL DS1 service) are entirely incompatible.

Circuit Emulation Services (CES) have been offered by both cable and telephone companies for serveral years. Some cable companies use CES to provision ISDN, T1, T3, etc circuits over their coaxial plant. Cable companies may be doing this only for their "high-value" customers. Telephone companies can use similar CES technology to provision circuits over FTTx or other local loop facilities. Some carriers have completely converged core networks now, so your circuit services may already be using CES. Carriers (or their vendors) think operating a converged network will be less expensive, and are trying to push the convergence closer to the customer edge. Have you noticed Comcast and other cable companies are increasing their video rates by up to 7% starting January 1, but not the price of voice or data services, even though they use the same coaxial cable for all three services?

Hello; On Nov 16, 2005, at 1:16 AM, Owen DeLong wrote:

--On November 15, 2005 8:14:38 PM -0800 David Schwartz <davids@webmaster.com> wrote:

...

...

--On November 15, 2005 6:28:21 AM -0800 David Barak <thegameiam@yahoo.com> wrote:

...

OK... Let me try this again... True competition requires that it be PRACTICAL for multiple providers to enter the market, including the creation of new providers to seize opportunities being ignored by the existing ones.

The worse the existing provider it is, the more practical it is to compete with them. If they are providing what people want at a reasonable price, there is no need for competition. If they are not, then the it becomes practical for multiple providers to enter the market. If you assume that the cost to develop existing infrastructure is not insanely less than the cost to develop new infrastructure, the isolation from competition comes directly from the investment.

1. The existing infrastructure is usually all that is needed for many of the services in question. Laying parallel copper as a CLEC is not only prohibitively expensive, in most areas, it's actually illegal. Usually, municipalities have granted franchise rights of access to right of way to particular companies on an exclusive basis. That makes it pretty hard for a competitor to enter the market if they can't get wholesale access to the existing copper.

2. The existing copper was actually deployed (at least in most of the united States) using public subsidies. The taxpayers actually paid for the network. The physical infrastructure should be the property of the people. The ownership claim of the telephone companies is almost as baseless as the Verisign clame that they own the data in whois.

...

For example, if Bill Gates took a few billion dollars out of his pocket and launched 80 satellites to provide wireless Internet access, it would be damn hard to compete with him if he wasn't trying to recover those few billion dollars. But if you spend a few billion, you get a few billion worth. Anyone else can spend the same amount and get the same advantage.

3. Except when you consider that there are only so many orbital slots that can be maintained. (see 1 above as well). If Bill manages to launch N satellites and N leaves N/2 orbital slots available for other uses, then, it's pretty hard to launch another N satellites at any cost.

I do not think that the ITU allocates orbital slots except for geostationary satellites (not even 24 hour inclined orbits, such as are so useful for satellite transmissions to cars). So, if you want to launch a Teledesic or Iridium clone, you can, assuming your credit cards are good for a few billion $. Frequency assignment is, of course, another matter.

...

If he already has the satellites and is providing the service other people want at a low price, then other competitors will lose. But so what? Consumers win. And competition doesn't exist to benefit the competitors.

<snip>

Owen

Marshall

-- If this message was not signed with gpg key 0FE2AA3D, it's probably a forgery.

On Fri, 11 Nov 2005, Sean Donelan wrote:

On Fri, 11 Nov 2005, Christopher L. Morrow wrote:

...

Actually, thinking about this, does a bit cost more when delivered from china or 'mci' (pick any domestic isp)? I'm asking not about the total cost, but say the cost from (to pick on sbc) SBC's front door to the consumer's front door ? Does a bit from Google (not yahoo since they have a 'relationship' with SBC) cost more than one from playboy.com ? (again, from sbc front door to consumer front door)

If the cost is the same front door to front door, then why would a customer willingly pay more for playboy over google? (or the other way around)

This is an interesting topic :)

Are you suggesting a return to cost-based regulation? At one time airline prices were regulated based on air mile distance.

No, I'm not, actually I think that the answer to my question was: "All bits cost the same to push inside 'my' network" (where 'my' is really any single entities network, and the cost is for that entity).

MCI Friends & Family charged different rates for phone calls depending whether the person you called was also a MCI customer. Was MCI illegally interfering with people calling AT&T customers by charging a different rate? Level 3 charges different rates for "on-net" versus "off-net" traffic. Is Level 3 illegally interfering with people accessing content on other ISPs buy charging more? Many cell phone companies offer "free" minutes when you call other people in your plan. Is Verizon illegally interfering with other cell phone companies by charging more? Or in each of this cases, are they actually charging some people less? How do you decide what is a "discount" or a "surcharge"?

good question, I think all of the examples though have on thing in common: all the 'discount' is on 'local' traffic (local to the network), the cost differential is applied to 'non-local' traffic. This sort of goes to my point that inside a network bits all cost the same, its the external places that cost more... Are the folks advocating making content providers pay for 'access' to their customers willing to stand up competing services locally? (something to keep their customers who lose access to things they really care about)

Not everyone may want to pay for 100Mbps Internet service in their home, but they may want to pay less for only 10Mbps Internet and also watch a bunch of HDTV. HDTV may be advertiser supported, and the advertiser may be willing to subsidize a portion of the bandwidth so the consumer doesn't have to pay as much.

What if folks started switching, where possible, to internet fed TV? What if, for instance, iTunes Video Store got 'all popular TV' and folks started combining TiVO activities with iTunes? (watch Smallville when you want, where you want, and off broadcast) TV-land is already going through some radical changes due to TiVO/Replay/PVR, one wonders what services like iTunes-Video and Yahoo Video (they annnounced a partnership with TiVO recently?) are going to do to the industry?

Or do we want the government to force consumers to buy more than they want?

yes, that always works out well :) I suppose it'd guarantee revenue for 'the evil empire' though :)

On Sun, 13 Nov 2005, Sean Donelan wrote:

On Sat, 12 Nov 2005, Christopher L. Morrow wrote:

Yep. The evil empires have a hundred years of experience dealing with regulation. If the regulators define what the Internet is or isn't, instead of the marketplace, I don't know if people would recognize it anymore. Common carriers can have lots of regulations, but most of the regulations just end up shielding the carrier from liability. They can just say the government makes us do it, even though the tariff was written by the company itself, and pass along the extra costs to the consumer. AT&T was very dull, but profitable essentially the entire time it was heavily regulated. What color should Princess telephones be this year?

Don't throw me in the briar patch :-)

I won't but blaine might :) Seriously though, phew! we were agreeing all this time! :)

The marketplace is messy. Regulation is seductive because it appears to be cleaner.

Cleaner... for who exactly? The miles of code required to figure out the mess created by the regulations? the consumers? ugh :( That's the deception we need to dispell.

Be careful Owen - i think you may be falling into a libertarian trap - worrisome because I respect highly things i have seen you write in past. Think about what you are saying: " Something to consider about this proposed "regulation"... It is actually

in many ways proposed "deregulation"

Yes it is indeed. It frees the duopoly to do whatever it wants. And Whittacre has said what he wants and what he will do quite plainly -- has he not? He will charge google and yahoo and skype for using his networks. Here is how this legislation is being read in London at a public telco blog recently launched by DRKW the large investment bank: http://telcotech.drkw.com/blog/archives/2005/11/will_evil_preva.html "For all of our sakes lets hope that the telcos are not successful in their lobbying effort in the US. If they are successful, you can bet that your investment in the fixed telecoms utilities is safer but innovation on the internet is in jeopardy - which do you think creates more incremental future value in the world ultimately?" Vint Cerf is on my economics of IP networks private mail list. The DRKW blog post partially cited above came in part from a public item comment of Vint's that i posted day before yesterday to my private list. It is fascinating that Sean Donelan whom I have known and respected since 1991 dug that 1997 item quote from Vint from my archives. Donelan: "In 1997, Vint Cerf was advocating the necessity of usage based pricing when he was still with MCI. http://www.cookreport.com/05.10.shtml COOK Report: Recall the date. This is PRE stupid network and again VINT is taking the pre-internet pre stupid network telco point of view. I'll post this to my list and see if Vint has anything that he wants to say about this 8 year old opinion. Owen, do you want some legislation that gives the CEO of ATT/SBC the world largest dinosaur a blank check to do as he wishes with *HIS* network. This bills language is HIGHLY deceptive. I too despise government incompetence but giving Whittacre a blank check is IMHO much worse. But don't take my word for it - check out DRKW's analyst's opinion. Fred Goldstein also has a pretty good analysis. I probably will not further respond to this thread discussion. Please forgive me but I am swamped with many things that demand attention. ============================================================= The COOK Report on Internet Protocol, 431 Greenway Ave, Ewing, NJ 08618 USA 609 882-2572 (PSTN) 415 651-4147 (Lingo) cook@cookreport.com Subscription info: http://cookreport.com/subscriptions.shtml IMS and an Internet Economic & Business Model at: http://cookreport.com/14.09.shtml ============================================================= On Nov 11, 2005, at 1:38 AM, Owen DeLong wrote:

Something to consider about this proposed "regulation"... It is actually in many ways proposed "deregulation". This bill removes more authority from the FCC and state and local governments than it grants. It provides a very minimal framework of regulation, then, except for taxation and a couple of other minor consumer protections, says "The government shall butt the hell out."

That's why I like it.

But Owen - what if getting evil gov't out gives Whittacre a blank check?

Owen

On Thu, 17 Nov 2005, Stephen Sprunk wrote:

Other than references to spam and a couple other minor things, there's a remarkable lack of discussion of content, either good or bad, in this draft. If anything, this appears to be the exact opposite of what SBC et al want. Given all the fuss about content and access to eyeballs, I'm actually pretty shocked about the complete turnaround here. Maybe previous drafts got too hot a reception?

Be careful what you ask for, you might just get it. Some people think the carriers make more money when customers use the network more, even if the user didn't intend to use the network a lot. Abuse departments and policing users costs money. If they had the legal cover of law prohibiting them from interfering with customer content, would the carriers just fire their abuse departments and charge customers for the bandwidth they use, regardless of the content? If your computer gets infected and starts spewing terabytes of traffic a month, will the carrier send you a bill at the end of the month for 10 Terabytes used, please pay $1,000,000? If your computer marked the packets as DSCP EF, could the carrier charge you a premium fee for those packets even if your computer was infected? If the law prohibits carriers from interfering with customer content, will the carrier just sit back and bill customers for bits regardless of what's in those bits? In the telephone world, if a phreaker breaks into a PBX and makes lots of toll phone calls, the PBX owner has to pay for the calls. Is Vint Cerf willing to take the bad, as well as the good from the telephone world? ISP terms of service are mostly about things ISP's don't permit customers to do, even if a legislature has not yet written specific laws prohibiting it. ISP terms of service have grown over the years in response to customer complaints about other users' activities.

Since port 80 and port 25 are lawful services everyone offering broadband will have to drop filters and provide full routing! Can you hear me now? Why yes, port 80 and port 25 are open, of course I can hear you.

Have you sent a letter to your congressional representative saying this? Of course an explanation of the technical terms "80" and "25" would be in order as well. Complaints on the NANOG list carry no weight in the Congress. --Michael Dillon